sba 504 fmpp loan program - 6.4
TRANSCRIPT
8/3/2019 SBA 504 FMPP Loan Program - 6.4
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Refinance Guide
SBA 504 FMPP
Loan Program
June 04, 2011
8/3/2019 SBA 504 FMPP Loan Program - 6.4
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efinance Product Eligibility
Can you answer Yes to all the following questions?
8/3/2019 SBA 504 FMPP Loan Program - 6.4
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efinance Product Eligibility (Cont.)
Does the loan request meet all the basic requirements of
a standard 504 loan request?
Small business size standards 51% owner occupied real estate
The CDC can document an Economic Benefit
The credit request meets prudent lending standards
Were the proposed debts for refinancing originated a
minimum of two years prior to the date of the SBA loan
application?
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efinance Product Eligibility (Cont.)
Were substantially all (85% or more) of the refinance loan
proceeds used for 504 eligible purposes?
Were all loan payments current within 29 days of
scheduled payment date for the debts proposed for
refinance over the last 12 months?
Were the debts proposed for refinanced secured by the
fixed assets to be pledged as collateral?
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Refinance Product Eligibility (Cont.)
There were no debts included for refinancing that were
federally guaranteed or part of the third-party lender
portion of an existing 504 loan?
Is the debt to be refinanced not owned by an associate of
the OC or EPC?
Was the debt proposed for refinance used for commercial
purposes?
Was the Operating Concern in operation for not less than
two years prior to the date of SBA loan application to the
SPLC?
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Lender Certification
When a lender is paying off their note through the 504
Refi product, the completion of SBA form 2416 is required
along with the full loan payment history. Lender does not
need to offer an interim loan but can use an escrow tofund debenture.
When the lender is paying off a 3rd partys existing debt,
it will require the completion of SBA form 2288 and
submission of 12 months payment history at the time of Refi 504 loan application. Lender will need to offer an
interim loan in a similar structure to a standard 504 with
its payoff at debenture funding.
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Lender Certification (Cont.)
Preparation of a standard 504 package
An appraisal engaged ASAP with CDC/SBA identified as an
authorized user of document; document will be used toestablish eligible SBA loan structure and borrower equity
in the subject project if applicable.
An environmental report ordered and scheduled to be
available when the 504 loan application is submitted to
the SBA Loan Center
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Lender Certification (Cont.)
Copies of the original note, debt instrument and/or
modification(s) secured to review the genealogy or
history of the loan for SBA eligibility purposes
Copy of the original deed for CRE and/or security
agreement used to secure the collateral for the note to
be refinanced
Loan payment transcript from the preceding 12 months
on all debts proposed for refinancing
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Lender Certification (Cont.)
Loan payment transcript from inception on all debts
proposed for refinancing if same institution debt
3rd-party lender in the 504 approval will need to recertifycurrency of the existing loan to be paid off by refinance
package
Lender certification that it is not aware of any pending
default prior to refinance, causing a shift of immediate
risk to the SBA
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Loan Structure
Funding for a refinance project will come from (3)
sources:
3rd-party lender not less than 50%
SBA 504 loan not more than 40%
Borrower contribution not less than 10%
.. of the appraised value
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Loan Structure (Cont.)
The combined loan amounts of 3rd-party lender and 504
loan must always meet the following criteria when
structuring debt:
The combined total loans in the 504 package may not exceed
90% of the appraised value of the fixed asset pledged as
collateral
The combined total of loans in the 504 package may not
exceed the outstanding principal balance of the proposed
debts for refinance