THE OFFICIAL BLOG of the SBA 504 EXPERTS

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When Speed is Critical, They Call Mercantile

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Back in June, we closed an SBA 504 loan in four days. Read that again: we closed a loan in four days. This particular loan was for the acquisition of an industrial facility totaling 177,749 SF for a manufacturer called Dynamic Integrated Solutions in San Jose, CA. The total project cost was $16.6 million and we provided the $5.355 million interim second mortgage. This project allows Dynamic Integrated Solutions to expand their assembly integration, improve efficiency by streamlining equipment, and take on more complex projects. This project also allows us to tell you that it’s possible to close an SBA 504 loan in just four days.

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Now, before you read any further, understand this: closing an SBA 504 loan in four days is not something you or anybody else can reasonably expect from any commercial lender. Even us. We pride ourselves on our speed and flexibility when it comes to underwriting, approving, and closing SBA 504 loans, but this just isn’t typical. It’s got to be some sort of record, right? Four days? C’mon.

Nevertheless, there are a few takeaways from this freakishly fast 504 loan:

First, the first mortgage lender who brought us in on the project really had their stuff together. Ray Crabb at Bank of the West provided us with every single document we could ever need right off the bat. If he hadn’t done that, there’s no way this loan gets closed in four days. Takeaway: it pays to be organized and have your stuff together. Whether you’re a lender, broker, or small business owner, having the required documents organized and accessible allows us to hit the ground running and turn things around quickly for you.

Second, the CDC for this SBA 504 project was on the ball. The Mortgage Capital Development Corporation was invaluable in making sure this loan was approved and closed within the extremely tight timeframe we had to work with. We’ve worked with this CDC on over 20 loans and that helped make this transaction seamless. Takeaway: it pays to choose a 504 lender that knows what CDCs are looking for when submitting a loan to them. After having closed nearly 600 SBA 504 loans in 40+ states we certainly know how to do that.

Third, Ray Crabb called US. This is something you’ve heard from us before, but we only do SBA 504 loans. Although we’ve been bought by two banks in five years, they’ve left us alone to continue specializing in SBA 504 loans because we’re good at what we do. Other banks who try to be all things to all people might have a hard time simply doing a single SBA 504, let alone turning one around in less than a week. Takeaway: choose a commercial lender who is an expert in the type of loan you need. If you came to us asking for an SBA 7(a) loan, we’d refer you to someone else. Maybe we could get it done, but we know you’d be better served by someone who specializes in 7(a) loans. If you need a 504 loan and you have all your documents in order, we just might be able to get it done in four days.

We’re glad we were able to work with Ray Crabb at Bank of the West and the folks at The Mortgage Capital Development Corporation to make this loan possible for Dynamic Integrated Solutions. It was truly all-hands-on-deck, and it certainly wasn’t easy, but that’s just what we do. We work hard, we understand the SBA 504 loan program extremely well, and we can handle a curveball or two. If we can provide interim financing for any SBA 504 loans you’re currently working on, call or email us today.

– Your 504 Experts

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Smarter commercial real estate financing for small business owners

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Who we are:

Since 2003, we’ve closed 569 SBA 504 loans worth more than $1.624 billion.

We’re nationwide, with closings in 40 of the 50 states as well as Puerto Rico and the District of Columbia.

Construction projects account for about half of our business, and we’ve built an exceptional construction administration team.

We’ve been on both sides of the commercial development process. Believe us when we say we’ve walked a mile in our borrowers’ shoes.

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Our loan volume is the largest it’s ever been

Mercantile Capital Corporation has loans on its books worth over $82 million.

In the past we’ve always reported on the number of loans we’ve closed and the total project costs we’ve financed. But today we want to let you know about a metric we haven’t publicized before, and how it confirms our place as a meaningful contributor to the 504 industry.

As of the end of the second quarter, we have 56 active loans on our books worth just over $82 million. That means we have 56 transactions on our books in different stages of the 504 loan process. Not only is this the largest this number has ever been, it also represents a tremendous growth in our loan volume.

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Can Any Lender Do a 504 Loan?

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Here’s the truth about SBA 504 loans: any lender can do one.

There’s nothing magical or mystical about it; no special club we belong to that enables us to provide 504 loans. But before you run out and grab the first banker you see and demand a 504 loan, a word of caution: there’s a difference between can and should.

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Mercantile & IBERIABANK Close First Loan Together

Mercantile & IBERIABANK Close First Loan Together

On May 27th, we closed our first SBA 504 loan in conjunction with IBERIABANK since our merger in late March. We provided financing for the acquisition and expansion of retail space for a high-end fashion boutique called Planet Bardot, located in the Knox Park area of Dallas, Texas. The $7.65 million project allows our client to purchase and renovate an existing 5,100 SF multi-tenant retail center. An additional 3,900 SF of retail space will be constructed which will allow the store to expand its footprint nearly 600% and lease the remaining space to third-party tenants. Planet Bardot will occupy about 5,000 SF (56%) of the property’s leasable space upon completion. The loan closed on May 27th and the construction period is estimated to be 9–10 months.

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