Frequently Asked Questions
If there's one thing we like better than providing great customer service,
it's taking the time to answer a question. Here are answers to some questions
that we see on a regular basis.
Have a question
you don't see here?
General
What is a Certified Development Company (CDC)?
How Do I apply for a Small Business Administration (SBA) 504 loan?
How do I determine if I’m eligible?
Do you finance startup businesses?
Are there job creation requirements?
Can I refinance and existing loan?
Do you offer financing options other than 504?
When can I prepay without penalty?
Can my down payment be other than cash?
Which bank(s) can you partner with?
What is your application review process?
Q: What is a Certified Development Company (CDC)?
A: A local area or statewide corporation or authority (for profit or nonprofit) that packages US Small Business Administration (SBA), bank, state and/or private money into a financial assistance package for existing business capital improvement. The SBA holds the second lien on its maximum share of 40% involvement. SBA requires that SBA 504 loans be processed by a CDC.
back to the top ^
Q: How Do I apply for a Small Business Administration (SBA) 504 loan?
A: Applying for an SBA 504 loan is comparable to applying for any commercial loan but with many more benefits. Begin by contacting one of our staff members and we will come to your place of business to further explain the program details. At BLP, we provide a checklist to simplify the process, we will work with your accountant and lender, and do all of the analysis, packaging, and communication with the SBA for you. Our goal is to simplify the process as much as possible for our borrowers.
back to the top ^
Q: How do I determine if I’m eligible?
A: To be eligible, the business must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, the business qualifies as small if it does not have a tangible net worth in excess of $8.5 million and does not have an average net income in excess of $3 million after taxes for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate or be used for refinancing. (See eligible criteria list)
back to the top ^
Q: Do you finance startup businesses?
A: Yes, startup businesses require an additional 5% equity injection by the borrower.
back to the top ^
Q: Are there job creation requirements?
A: Typically job creation or retention is a requirement, however waivers are available in some cases.
back to the top ^
Q: Can I refinance an existing loan?
A: No, not with an SBA 504 loan.
back to the top ^
Q: Do you offer financing options other than 504?
A: Yes, there are a number of state and community loan programs that we and our partners offer. We’ll recommend the program that is best suites your needs.
back to the top ^
Q: When can I prepay without penalty?
A: There are declining prepayment penalties. If you wish to prepay, the business needs to notify BLP, in writing, 45 days prior to the date on which the company wishes to repurchase the debenture. The prepayment penalties last up to half of the loan life, for example a 20 year loan will have prepayment penalties up 10 years and same for a 10 year loan with penalties up to 5 years. (See prepayment schedule)
back to the top ^
Q: Can my down payment be other than cash?
A: Yes, the down payment can also be in the form of the value of previously acquired land (which can include building(s), structures, and other site improvements that will be part of the project property).
back to the top ^
Q: Which bank(s) can you partner with?
A: Here at BLP we can partner up with any financial institution of your choice.
back to the top ^
Q: What is your application review process?
A: Applications are considered at weekly loan committee meetings. If approved, following loan committee meeting, the application will be taken into consideration by the executive committee in less than 24 hours. If approved, the final step is to submit the application to SBA for final consideration.
back to the top ^
