The Official Blog of the SBA 504 Experts

504 Loan Blog

SBA 504 Experts Need YOUR Help with YOUR Bank . . .
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If you’ve read this blog for any length of time, you know that MCC is still lending. We’ve continued to provide financing for owner-occupied commercial property (our specialty) while other lenders have been pulling back and hunkering down. That said, I’ll be the first to admit that things have gotten tougher in our industry. Yes we’re closing loans, but we’re also working twice as hard to get them done. I bet you’re seeing the same in your business, even if you’re in a different industry – – twice the work for the same result.

In response to this tougher environment, we’ve rolled out a program to help other banks provide the commercial property financing that business owners need and are trying to get. We’re one of the most active SBA 504 loan originators in the country, and we’re helping banks provide financing when they want to limit their risk to only 50% of the total project cost. We do this by holding the interim second mortgage until the SBA debenture funds. But we can also help in situations where a bank prefers not to portfolio any portion of the loan, and it would prefer to simply refer the entire SBA 504 transaction to us and earn a referral fee. This may be because a particular deal doesn’t quite fit what the bank is comfortable with, or perhaps a loan that it outside the bank’s geographical footprint. It’s a win-win for the bank – – its Clients get the financing they need and there’s no way we would “steal” the Clients, since we don’t offer any other financial services or products.

We thought this would cause a little bit of a stir among Community Banks, but our efforts don’t seem to have had the impact we hoped for. To formally launch this Community Bank Loan Program, we mailed out nearly 5,000 letters detailing what I just explained here. Then we sent close to 5,000 leather bank bags with similar information as the first letter, but also with several additional articles that prove our expertise in small business lending. After all that, we made just under 8,000 phone calls to follow up on our packages . . . but our message still isn’t getting out as much as we’d like.

So we need YOUR help.

The next time you know of a commercial real estate acquisition (with or without renovations) — whether it’s for you, a Client or someone else you know – – mention to the banker that they should consider working with us. It’s a way to help the banker do more business and help get a deal done. If you have any questions about our interim loan program for Community Banks, or if you just want to know more about what we do, call me at 1-866-622-4504 or email me at info@mercantilecc.com. Thanks in advance for your help.

Dedicated to the Continued Success of our Nation’s Small and Mid-sized Businesses,

Chris

P.S. People ask me all the time: “What exactly do you do?” I suppose it’s a fair question – – most major banking institutions perform lots of functions and do lots of different things. (I personally believe that means they don’t do any one thing particularly well.) We specialize in providing Smarter commercial property financing via the SBA 504 loan, which we’ve renamed The SmartChoice Commercial Loan. Here are some of the benefits of working with us:

  • Save valuable capital (with up to 90% loan-to-cost financing because we require 1/3 to 1/2 the down payment of ordinary banks).
  • Lower your monthly payments (with up to 25-year, fully-amortizing terms).
  • Have the least expensive capital available (with below-market, long-term fixed interest rates).
  • Finance nearly ALL project costs into the loan (loan-to-cost financing instead of loan-to-value).
  • Have the all-around SMARTEST Commercial Financing for owners of small and mid-size businesses provided by the acknowledged National Experts in this type of lending . . . us.

P.P.S. I mentioned earlier that things are tougher for us these days and because of that, there are some hard truths I’ve had to face. It’s become all but impossible to secure financing for certain property types, despite our best efforts. These include restaurants, hotels, and gas stations/c-stores. If you know someone looking to purchase one of the property types, we’ll be glad to take a look at the loan application, but know that it’s not promising from the start. However, we ARE able to lend on office buildings, office/warehouse, industrial facilities, office condos, medical offices, childcare/daycare facilities, and free-standing retail properties, so please let us know when you hear of someone interested in purchasing one of these types of properties.

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9 Comments

  1. John Hart says:

    We are aware of the program and have mentioned it in several situations. We have not had many situations that have needed it, but we will keep our eyes open for one.

  2. Paul Ferruzza says:

    Your doing a great job, we have a Closing together on Dec 1st, thanks to Adam for all his help. Looking forward to the next transaction.

  3. Sam Talbert says:

    I have several clients looking for loans. Please call me or Email me and I will give you thier particulars.
    Sam

  4. Mike Culhane says:

    Hey Guys,

    I’m a new commercial broker and I would like to talk with someone in detail about your 504 requirements and what your looking for in one of these loan packages. I’m looking to develop a relationship with MCC and will work tirelessly to bring you solid deals. Who can I speak with? Please advise…thanks.

    Mike Culhane

  5. J. Steven says:

    Chris: Great idea, and pardon me for being ignorant but If I’m bringing in referrals from a deal the bank doesn’t want to do but would like to service their clients, just how would you suggest is the best way to earn a commission for myself.

    Thanks

  6. Shonda Brand says:

    HI I THINK THIS IS SUPER!!!! I’M All FOR IT.

  7. B. T. Elmer says:

    Please send a copy of what was sent out to banks.

    I don’t know if you covered banks in the up-state New York area or not and would like to discuss with several banks in our area.

    Thanks

  8. Joe Welnack says:

    Banks that are still lending don’t seem to care for the SBA 504 because they can’t earn the fees they used to on commercial loans.

    My bank is “closed” for all commercial lending even on excellent credit with staggering LTV propositions. They are simply too darned conservative to partner up with the government. The problem facing community banks down the road is that they will be continuing to deal with problem loans after their good customers have paid off their obligations.

    Reaches a point of diminishing returns.

    Sad situation.

  9. Ob says:

    I was kind of disappointed when i read the list of properties you can invest in. My nitch is multifamily apartments, can sba 504 work for this property class?
    Also, what is the credit requirement of the principal(s) in the case of an apartment loan request? Waiting for an answer
    Thank you

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