6.72% 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 September 8, 2006)

Rates are continuing to trend back down from a spike to 7.25% in July, as the 10-year Treasury rates have come back down from earlier fears of steadily increasing inflation.

One of the biggest selling points for the 504 program is our aggressive approach to collateral. By its very design, the program allows us to take loan-to-value positions in the 90-95% range, without additional collateral.

Why are we willing and able to take such an aggressive stance? The SBA intentionally set the program up to tie up as few of the borrowers' assets and liquid resources as possible - so that they can have the resources they need to grow their business and create more jobs.

Consequently, we generally will take no collateral on our loan other than a second lien on the real estate involved in the project, and guarantees from the business owners. Probably 95% of our projects involve no other collateral than the project real estate.

What kinds of cases lead us to consider taking additional collateral to secure our interest? Here are the primary examples:

• The building itself does not end up with an "as- completed" appraised value close enough to our total project costs. Some specialized facilities will not generate adequate appraised value; if the shortfall is significant enough, we might need to consider additional collateral.
• The project involves a combination of real estate and equipment, and the dollar value of the equipment involved leaves us too exposed on our LTV. We can sometimes address this situation by getting a first position on the equipment being financed, but if not, we may look to have some additional collateral.
• The project is a large equipment-only project. Because the liquidation value of equipment is often so low, if a project nears $1 million in value, we might need something else to support our position until the loan has seasoned properly.

Even in these cases, Self-Help may approve a loan without requiring additional collateral other than the appropriate liens on the project assets being financed, if the 504 loan is being made to an existing business that meets the following criteria:

• Proven management
• Strong, consistent cash flow that is more than minimally adequate to support the new debt
• Expansion that is a logical extension of current operations

We will always attempt to avoid taking a lien on inventory, accounts receivable and assets not eligible for 504 financing. The firm generally needs to have these assets available to secure needed working capital financing, and we don't want to limit growth by tying them up unnecessarily. Therefore, if we determine we do need additional collateral, we would look toward other assets of the owners to provide the needed collateral.

If you have a concern about collateral issues on a proposed 504 loan, please feel free to contact your Self-Help loan officer. We'll walk through the project with you, and let you how we can address those concerns - and we'll do our best to finance the project without taking on additional collateral.

Location: Worrell Center, Wake Forest University, Winston-Salem
Date: Sept. 24-27

The N.C. Institute of Minority Economic Development (NCIMED) is sponsoring an executive education program at the WFU Babcock Graduate School of Business. It's a great opportunity for privately held Hispanic family-owned businesses that are beyond the start up stage.

Know any interested businesses? Please contact Crystal German by Sept. 20 at cgerman@ncimed.com or (919) 956-8889.

For additional information, please visit NCIMED's website.

Date: Sept. 28, 2006
Time: 11 a.m. to noon
Location: Bank of America, downtown Asheville, 3rd floor conference room

The SBTDC and Self-Help Asheville offices are teaming up to offer an information session for WNC lenders about the 504 loan program. This may be a good session for your small business clients to attend.

Topics will include:

• What is the 504 Loan?
• How does the loan work?
• What are the benefits for the borrower?
• What are the benefits for the lender?
• Who can qualify?

Date: Oct. 18
Time: 8 a.m., breakfast provided
Location: Winston-Salem Chamber of Commerce, 601 W. Fourth St.
For directions to the Chamber of Commerce, click here.

The Winston-Salem Piedmont Chamber of Commerce and Self-Help are hosting a breakfast and panel discussion open to 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 creative secondary-market financing options for commercial real estate development will follow, and include representatives from Surry Branch & Trust, Zions Bank, Bank of West, the Small Business Administration and Self-Help. The topics the panel will discuss include the following:

• Nontraditional financing methods lenders may want to consider
• Ways SBA 504 program fixed-asset financing may benefit lenders and small business clients
• Methods of generating income via the secondary market
• Tips for reducing risk while boosting revenue
• Guidance on where to refer small business clients who don't meet lending guidelines

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. 12, as space is limited.

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