6.34% fixed for 20 years for real estate projects, including acquisition, new construction and major renovation.

6.87% fixed for 10 years for equipment and machinery.

(Rate as of Oct. 9, 2006)

On Oct. 1, the SBA guaranty fee on 504 loans dropped from 0.192% to 0.018%.

What does this mean for you and your borrowers? On all new loans that are approved after Oct. 1, the effective rate for the borrower will end up being about 20 basis points lower than it will be for loans approved in the prior fiscal year.

To give a sense of the impact of this change, we estimate that rates on 504 loans approved after Oct. 1 would have dropped from 6.55% to 6.34%. For a 20-year fixed-rate loan, that's pretty darn good.

Why has this rate come down? Because the 504 loan portfolio has been performing so well, we are seeing few loan losses, and thus we can charge much lower guaranty fees (which translate as loan-loss reserves for the SBA).

These fees change with each year, and apply to the federal fiscal year in which the SBA approved the loan. So it will apply to all loans we get approved from Oct. 1, 2006, to Sept. 30, 2007.

As you look to help your borrowers take advantage of these low rates, we thought we would review eligible project sizes for 504 financing.

Typical cap: For most loans, we can finance up to $1,500,000 of the project amount. At our typical project participation of 40% of the cost, that translates to projects of up to $3,750,000.

Public-Policy: If the borrower’s project meets one of the SBA’s public-policy goals, then our participation can extend up to $2,000,000. In these cases, the 40% participation allows us to fund projects as large as $5,000,000. Eligible public-policy definitions include rural areas, veteran- owned and export businesses, and many more.

Each public policy goal has a specific SBA definition. If you need to figure out whether your customer meets one or more of these goals, your local Self- Help loan officer will be happy to help.

Manufacturing: For manufacturers, our 40% participation can range up to $4,000,000. This limit means we can finance manufacturing- related projects as large as $10,000,000.

Project Size Considerations: In reality, our projects often can be much larger than the suggested maximums for these three categories. For instance, it’s not entirely necessary that we finance 40% of the project budget (and for new businesses and special-purpose properties, we have to finance less).Thus, we can use a $1.5 million loan as part of a $6 million package, if the loan meets our underwriting standards.

The upper end of the manufacturing scale is somewhat untested, as this is a new feature of the program. But we could see participating in projects ranging in the $12-13 million range if the deal is solid and creates new jobs.

In sum, we may have far more flexibility to help you with large projects than you realize. Feel free to contact your local Self-Help loan officer about partnering to finance a large project.

LENDER	LOCATION	INDUSTRY	PROJECT AMOUNT
First Citizens Bank	Durham	Dentist	$910,000
First Citizens Bank	Charlotte	Law Practice	$884,600
First National Bank & Trust	Ramseur	Apparel Manufacturing	$2.49 Million
GE Capital	Fuquay-Varina	Construction: Trim/Carpentry	$1.2 Million
Southern Bank & Trust	Murfreesboro	Restaurant	$460,000
Temecula Valley Bank	Pineville	Disaster Recovery	$660,000

Date: Oct. 18
Time: 8 a.m.
Price: free, breakfast provided
Location: Piedmont Club, BB&T Financial Center, 19th floor, 200 W. Second St., Winston-Salem

Self-Help is hosting a breakfast and panel discussion for Triad lenders. Stan Mandel, director of Wake Forest University’s Angell Center for Entrepreneurship, will address the featured topic: Pockets of growth: small business trends in the Triad.

A panel discussion on innovative financing options for small businesses and owner-occupied commercial real estate will follow.

The event is free and open to Triad-area lending and economic development professionals. Please RSVP to Linda Comstock at (800) 269.7426 ext. 2610 or lindac@self-help.org by Oct. 16, 2006, as space is limited.

Lending Partner: The Fidelity Bank
Location: Sanford, N.C.
Project: Land purchase of 30 acres and covered arena construction (15,000 sq. ft).
Community Impact: Rural development, woman-owned sole proprietorship

Susan "Susie" Wiedman partnered with The Fidelity Bank and Self-Help to expand her dressage training business in a rural area between Sanford and Apex. When Susie approached us for a loan she had more than 20 years of experience as a self-employed horse trainer and award-winning dressage professional, competing regularly at the Grand Prix de Dressage, the highest level of competition in the world.

Operating as a sole proprietorship, Susie used her SBA 504 loan to buy 30 acres of land and construct a 15,000 square-foot indoor arena for Encore Sporthorse Dressage Training Center. Prior to this expansion, Encore Sporthorse had been leasing boarding and training space, usually without access to an indoor or covered arena, which resulted in an uneven revenue stream and limited growth opportunities. Poor weather alone was resulting in estimated annual losses of $50,000.

"My business has doubled," says Susie. "I have 15 horses in full training now, which is a phenomenal increase in business due to the quality of facility we were able to buy."

There are three main barns on the property, each with 42 airy box stalls, tack rooms and wash racks. Services include horse training, riding lessons, clinics and shows.

“I wouldn’t have been able to do this without the financing,” says Susie. “We now have one of the largest equestrian facilities in North Carolina. It was nice to have someone willing to take risk on a horse farm. Horses don’t generally engender lots of confidence in lenders. This has turned out really well for us.”

Call the Self-Help loan officer nearest you to discuss a project or learn more about how you can use an SBA 504 loan to help your small business customers with expansion needs.

Charlotte Region: Dale Harroldand Ralph Ansell, Self-Help, Great Aunt Stella Center, 926 Elizabeth Ave., Suite 302, Charlotte, NC 28204 * 800-394-7428

Fayetteville Region: Allen Cofiori, Self-Help, 100 Hay St., Suite 300, Fayetteville, NC 28301 * 800-774-7966

Northeastern NC Region: Gerry Blood, Self-Help, 301 South Evans St., Suite 306, Greenville, NC 27858 * 800-893-9669

Southeastern NC Region: Louis Rogers, Self-Help, 272 N. Front St., Suite 215, Wilmington, NC 28401 * 877-559-4284

Triad/Greensboro Office: Anna Tefft, Self-Help, 122 N. Elm St., Suite 1015, Greensboro, NC 27401 * 800-269-7426

Triad/Winston-Salem Office: Anna Tefft, 500 West Fourth Street, Suite 200, Winston-Salem, NC 27101 * 336-478-2611

Triangle Region: Joe Osowski, Self-Help, 301 W. Main St., PO Box 3619, Durham, NC 27702 * 800-476-7428

Western NC Region: Tom Byers, Self-Help, 34 Wall St., Suite 704, Asheville, NC 28801 * 800-229-7428

Contact our SBA 504 Program Director, Jim Overton, , at 919-956-4473.

Or contact our new SBA 504 Marketing Officer, Jamie Miyares, , at 919-956-4670.

Email : 504loans@self-help.org

Visit Us Online : http://www.self-help.org/504loans