"Your Lending Partner"


John Reichard
Information related to the SBA 504 loan program for small businesses.

Provide Options to your Customer

by reichard on Tuesday, October 9, 2018 8:00 AM

I’ve spoken with several lenders over the past couple of months and one topic that has been mentioned recently is: Options.  Small business owners are becoming more knowledgeable when it comes to financing for their business and are also being more aggressive in seeking out the best deal from competing lenders.  For those who just offer a conventional financing scenario – for example, 80% financing on a real estate deal, it usually comes down to getting beat up on the rate you are offering or the length of the fixed rate period.  If you are in a very competitive marketplace for deals, there is usually at least one lender out there who is willing to undercut you on your best rate. - more


Options Available to Borrowers Facing a Balloon Payment

by reichard on Monday, October 2, 2017 10:00 AM

When financing owner-occupied commercial real estate, many small businesses secure long-term financing through their bank.  While their payments are usually based off of a 20-year amortization, the actual term (length) of the loan might be less, resulting in a balloon payment (a larger-than-usual one-time payment at the end of the term of the loan).  Depending on the timing of the balloon payment, this could mean that about 60% of the original loan amount would become due. - more


Ag Lending with the SBA 504 Loan Program

by reichard on Thursday, May 11, 2017 1:00 PM

For those familiar with SBA 504 financing, the type of borrower that would most likely come to mind that would qualify for a 504 loan would be a manufacturer or a service-related business.  However, SBA 504 loans can be used to finance agricultural enterprises as well.  This blog talks about how an SBA 504 loan can benefit ag lenders as well as farmers. - more


SBA 504: A Quick Guide for Lenders

by reichard on Tuesday, February 21, 2017 1:00 PM

When it comes to SBA financing for small to medium sized businesses, most lenders are at least a little familiar with the SBA 7a guaranty program.  However, most are not familiar with the SBA 504 loan program.  Not having knowledge of this beneficial loan program puts your lending institution and your borrower at a disadvantage in terms of options for structuring a financing package. - more


The Use of Non-Bank Lenders

by reichard on Tuesday, January 5, 2016 4:00 PM

Happy New Year everyone!  I’m starting out 2016 with an unconventional method of financing an SBA 504 deal – using a non-bank lender for the 50% portion of the project.  While traditionally the Third Party Lender, or participating lender alongside the SBA 504 loan, is a community, regional, or national bank, using a non-bank lender does have its advantages. - more

Non-Bank Lenders

SBA 504 – A Partnership with Lenders

by reichard on Tuesday, October 6, 2015 11:00 AM

We here at SEDA-COG and our lending partners want to see small businesses grow and succeed. Our SBA 504 loan program is the perfect fit for this and builds partnerships within our community.

Some lenders may view the SBA 504 program as a competitor in the lending marketplace, but banks are an important and valued partner because every SBA 504 project needs a senior lender.

Today, I want to showcase how we form important partnerships with banks and the tremendous benefits of the 504 loan program, making it a win for the borrower and the lender. - more


Closing and Funding of the SBA 504 Loan

by reichard on Tuesday, September 1, 2015 2:00 PM

Unlike most commercial loans, where funds are disbursed at settlement, SBA 504 loans act differently.  The primary reason is that SBA 504 loans are packaged into a bond offering and sold to investors and the proceeds of the bond sale is what provides the money for the loans.  Therefore, there is a delay between closing and the actual funding of the 504 loan.  Today’s blog topic discusses the closing and funding process and how the loan proceeds are disbursed. - more

Closing and Funding

SBA 504 – Leasehold Improvements

by reichard on Tuesday, August 18, 2015 4:00 PM

One of the eligible uses of SBA 504 funds is to finance leasehold improvements.  While a leasehold improvement project is harder to do versus other real estate needs such as a building acquisition, construction, or renovation, they can be done given the right circumstances.  This week’s blog discusses the underwriting criteria needed for financing a leasehold improvement project through an SBA 504 loan. - more

Leasehold Improvements

SBA 504 – Franchises

by reichard on Tuesday, August 11, 2015 2:00 PM

One popular type of business, especially for retired vets looking to start their own business, is a franchise.  A franchise offers pre-opening and ongoing support to the franchisee and typically involves an established product or service that may already enjoy brand-name recognition.  But in dealing with a franchised business, the SBA needs to review the franchise agreement in order to determine eligibility for an SBA 504 loan.  Today’s blog focuses on franchise reviews. - more


SBA 504 – Affiliates

by reichard on Tuesday, July 7, 2015 1:00 PM

One area in the review of a potential SBA 504 loan that is sometimes difficult to wrap your arms around deals with possible affiliated businesses to our borrower.  Determining if there are any affiliated businesses to our borrower is important for several reasons.  This week’s blog focuses on what impact affiliation might have and how the SBA determines affiliation. - more