Home
>
Small Business
>
The SBAs Savviest Program

The SBAs Savviest Program

Forget everything you've ever heard about the U.S. Small Business Administration (SBA). The negative connotations may have been warranted in the past, but the SBA is different these days. The SBA is worth every penny of its more than $22 billion budget on the basis of a single program alone: the SBA 504 Loan Program for small business owners who want to acquire or develop their own facilities.

In fact, SBA 504 loans may rank as one of the most effective domestic economic development programs the federal government administers.

Lots of entrepreneurs ?? and far too many bankers, ironically ?? dismiss the SBA on the basis of its 7(a) lending program that always seems to need supplemental appropriations by the U.S. Congress.

The 7(a)'s reputation may or may not be deserved, but some of its negativity has managed to soil other truly effective SBA programs.

SBA 504 loans, by contrast, are a dynamo. They work; they work well; and unfortunately by some of the historical problems in the SBA's 7(a) program, a dark shadow has been cast over 504 loans causing not many people to know about them.

In fact, for too long, I have heard many otherwise knowledgeable lenders dismiss SBA 504 loans based on faulty and out-dated information.

I've been providing SBA 504 loans for more than eight years. Over two years ago, I founded Mercantile Commercial Capital, LLC to focus exclusively on providing 504 loans, and we're still the only lender nationwide to primarily do this. To date, we've closed more than 60 loans worth a total of more than $67 million in only 30 months of business. We offer other financing options too, but SBA 504 loans are by far our most popular and most rewarding program.

So far, every qualified 504 loan proposal we have submitted to the SBA has been approved and funded, or is soon to be funded.

The SBA knows the 504 is a hot property. Funding has grown about 22 percent a year since 2000. Last year, 504 loans helped fuel about $10 billion in total capital investments for 8,000 small businesses throughout the U.S. In fact, these loans helped create about 75,000 new jobs last year through the "equity savings" small business owners experienced.

Entrepreneurs, real estate brokers and accountants are gradually waking up to the fact that 504 loans were designed to level the playing field for small businesses in the marketplace. With 90% loan-to-cost financing of most commercial real estate projects, 504 loans are very powerful.

For the borrower, SBA 504 loans offer long-term, below-market, fixed-rate financing at better terms than are available from any private sector lender. And if that wasn't good enough, borrowers generally put half as much money down for 504 loans, which enable them to grow their businesses a lot faster. For every $50,000 of SBA guaranteed funds, small business owners need to create or retain one job in the next two years. It is in this way that 504 loans have become an engine for economic growth in America.

Lending amounts are generally not capped or limited and only non-public, for-profit businesses qualify. Three financial qualifications, however, set some limits: the borrower's small business must have a tangible net worth under $7 million; the operating company's net income for the previous two years must average less than $2.5 million annually; and the borrower cannot have liquid, non-retirement assets greater than the total project amount.

Most small businesses have no trouble meeting these qualifications. In fact, over 98 percent of all businesses in Florida, for example, qualify for SBA 504 loans.

What sorts of businesses make the most appropriate SBA 504 loan candidates? We see an extraordinary number of service professionals (physicians, attorneys, accountants, etc.), and we also finance plenty of franchisees, manufacturers and distributors. But in truth, any business with a track record or at least some solid, related experience is an appropriate SBA 504 loan candidate. The 504 Loan Program collateral requirements are generally limited to the commercial real estate facility that the loan finances, and approvals and closings happen in days and weeks, not in multiple-months as it was in the past.

Historically, the SBA was usually considered a lender of last resort. But compared to ordinary commercial financing, 504 loan terms and conditions are so good that for almost every small business, an SBA 504 loan should rank as their top choice.

Bankers have any number of reasons they've dreamed-up why not to consider SBA 504 financing and, to be candid, I'm okay with that. It just means we'll be here to help a lot more small businesses grow with our focus on the SBA's savviest program: 504 loans.

* * *

www.mercantilecc.com

Chris Hurn is President and Chief Executive Officer at Mercantile Commercial Capital, LLC, a leading provider of SBA 504 loans for business owners.

Chris actively participates in, among other things, the business development, underwriting and marketing functions of MCC. Previously, he worked as a senior management consultant, financier and executive with companies such as GE Capital, Heller Financial and NAI Realvest Partners. He has advised, financed and helped many small to mid-sized businesses throughout Florida and the Northeast for over ten years.

recurring cleaning service Wilmette ..

In The News:

Google's discontinued Nest thermostats still secretly upload home data to company servers despite losing smart features, raising serious privacy concerns.

New Android malware NGate steals NFC payment codes in real-time, allowing criminals to withdraw cash from ATMs without your card. Learn protection tips.

DoorDash confirms data breach exposing customer names, emails, addresses after social engineering attack. Learn how to protect yourself from scams.

Concerned about Google's AI scanning your Gmail? Learn how to disable Gemini features that access your emails, Drive files and Chat messages for privacy.

Google warns Android users about dangerous fake VPN apps hiding malware that steals passwords, banking details and personal data from phones and tablets.

Apple's digital passport feature lets iPhone users breeze through TSA checkpoints this holiday season using Digital ID technology at 250+ airports.

A new phishing scam targets family photos with fake "Cloud Storage Full" alerts. Criminals steal credit card information through fake sites. Learn protection tips.

South Korean scientists create ultra-thin fabric muscles that turn clothes into robotic assistants, lifting 33 pounds while weighing under half an ounce.

Archer Aviation has acquired Hawthorne Airport for $126M to launch an LA air taxi network ahead of the 2028 Olympics, featuring AI-powered eVTOL operations and next-gen aviation tech.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Fake AI apps disguised as "ChatGPT" and "DALL·E" are flooding app stores with dangerous malware that steals data and monitors users without detection.

Fake buyers demand specific vehicle reports from unknown sites to steal credit card information from car sellers, but warning signs can help identify these scams before paying.

Android users can now manage apps across multiple devices more easily with Google Play Store's updated remote uninstall button in the latest update.

NASA's Perseverance rover discovers shiny metallic rock on Mars that could be a meteorite from an ancient asteroid, containing high levels of iron and nickel.

Holiday scams spike during Black Friday and Cyber Monday as criminals exploit your leaked personal data. Learn how to protect yourself from fake stores and phishing.

Commerce Department proposes TP-Link router ban over Chinese security risks. Learn how this potential prohibition could affect your home network and devices.

Hyundai AutoEver America suffered a data breach affecting 2,000 current and former employees, exposing names, Social Security numbers and driver's license information.

Washington court rules automated license plate reader images are public records, even when stored by vendors like Flock Safety, setting precedent for transparency.

Fake airline texts claiming flight cancellations are targeting travelers with convincing scams. Learn how cybercriminals steal personal data and credit card info.

Discover how iOS 26's new Adaptive Power feature automatically extends iPhone battery life by learning your usage patterns and adjusting performance intelligently.

New TikTok malware campaign tricks users into running PowerShell commands that download Aura Stealer, which steals credentials and authentication tokens.

Gaia Family offers fixed upfront pricing for IVF cycles with unlimited embryo transfers and financial protection, partnering with over 100 U.S. fertility clinics.

The Jetsons Act aims to position Pennsylvania as a leader in advanced air mobility by establishing regulations for hybrid ground-air vehicles.

Fake Geek Squad invoice emails are targeting users with convincing charges and urgent phone numbers to steal personal information and money.

Fox News Digital's artificial intelligence newsletter digs into a robot in Russia that faceplanted, George Clooney's alarm and OpenAI's rivalry with the New York Times.