SBA 504 Fee’s Are Reduced for FY2017
On Friday, September 16th, 2016, the U.S. Small Business Administration issued “SBA Information Notice 5000-1389” which provided information about fees for SBA 504 loans approved during FY2017 (Oct. 1, 2016 – Sept. 30, 2017). These changes are only applicable on loans approved on, or after, October 1st, 2016.
Last year, for FY2016, SBA changed the upfront guaranty fee that SBA is authorized to charge the SBA 504 borrowers that is normally included in the debenture fees from .5% to 0. This will continue to be zero for FY2017, however, there is an additional fee reduction for FY2017! The annual service fee on traditional SBA 504 loans is reduced from .914% to .697%, a reduction of 21.7 basis points! On the new 504 Refinance Program, the annual service fee is reduced from .958% to .731%, a reduction of 22.7 basis points! This annual service fee is figured into the overall effective SBA 504 interest rate for the borrower. In comparison, September’s 20 year effective interest rate on traditional SBA 504 loans was 4.082% fixed for the 20 year period. With this fee reduction, the 20 year effective rate would have been approximately 3.87% for September’s pricing!
The September overall effective rate on the new 504 Refinance Program was 4.136% fixed for the 20 year period. With this fee reduction, the overall September effective rate would have been approximately 3.909%!
This is great news for our Small Business Owners!
Give your MBFC Business Development Officer a call today for more details!
MBFC LENDER’S LOYALTY REWARDS PROGRAM
MBFC would like to thank our lenders for their continued loyalty! With your continued partnership in helping to promote economic growth in each of your communities utilizing MBFC and the SBA 504 Loan Program, we have created more than 26,000 jobs in the state of MN and funded over $717.9 Million in SBA 504 loans!
The following is based on accrued loan volume per individual lead lender throughout each fiscal year with MBFC*:
Loan Volume and Gift Card Paid to Lead Lender
Per MBFC/SBA Loan Approval
$1,000,000 or less $1,000,001-$3,000,000 $3,000,001 or more
$50 Amazon gift card $100 Amazon gift card $150 Amazon gift card
MBFC Lender Of The Year
MBFC’s Lender with the highest dollar amount in SBA 504 loans approved by MBFC/SBA during a fiscal year (Oct. 1- Sept. 30) will be named MBFC Lender of the Year. MBFC’s Lender of the Year will be rewarded with an all-expense paid trip to the NationalAssociation of Development Companies’ Annual Conference (NADCO)! The trip will include conference registration, airfare, four-night hotel stay and meals for two people.**The MBFC Lender of the Year will be announced during MBFC’s annual meeting in October
*Awards are paid out upon MBFC/SBA loan approval. Dollar amounts are limited to one fiscal year, starting Oct. 1. All determinations are made by MBFC. Prizes are subject to change under the discretion of MBFC (in case of unforeseen circumstances). As an option for those who cannot accept the reward, MBFC can donate the prize to a charity of lender’s choice on behalf of lender’s company.
**MBFC credits each debenture dollar approved during the Fiscal Year (October 1-September 30) to the individual lending branch or office where the loan originated, whether or not the loans came through one or more lenders. The winning financial institution may select a 504 origination officer from their location to accept the award. Any application received during the FY that have not yet been approved will carry over into the following FY.
Contact your Business Development Officer to learn more.
Minnesota Business Finance Corporation (MBFC) is honored to present Jason P. Hoffman, co-owner of Hoffman, Hamer & Associates, PLLC, our VetLoan Advantage rebate check for $3,000. MBFC is the only Certified Development Company in Minnesota to offer a rebate to business owners that are active or retired members of military service.
Jason P. Hoffman graduated from Hamline University School of Law in 2002. While Hoffman was in law school, he served in the US Army Reserve JAG Legal Support Organization. He started his own practice in 2005 in Faribault. Hoffman was looking to expand his office and decided to purchase a building in the downtown area that had a great location but needed some improvements. Through the SBA 504 loan program, Jason was able to substantially renovate the building for his practice and make an investment in the City by helping to stabilize the block.
The firm practices in the areas of real estate, estate planning, business and family law, and civil litigation. Jason is active in the Rice County Bar Association as well as the Faribault Rotary Club.
MBFC thanks Jason P. Hoffman for his service to our country.
Minnesota Business Finance Corporation (MBFC) recently hosted 10 SBA 504 Refinance Training sessions throughout Minnesota. There were 250 of the State’s top Lenders, Economic Developers, Business and Government Officials in attendance. This was a great success and we thank the lending industry leaders, who provide financing resources for our small business owners, for learning more about the SBA 504 Refi program.
The SBA 504 Refi Program is off to a fast start with applications being accepted as of June 24, 2016. MBFC already has several SBA 504 Refi loan approvals and have been closing them just as quick! The SBA 504 interest rate environment is very attractive at 4.14% fixed for 20 years and 4.16% fixed for 10 years. In today’s competitive lending environment, the SBA 504 Refi can be a nice tool for you to use to acquire additional business.
Highlights of the program are as follows:
1.The commercial debt to be refinanced must be fixed asset debt and at least 2 year old.
2. The loan or loans being refinanced must not have any late payment history in the previous twelve months and evidence of such must be presented.
3. CASH OUT REFINANCING IS PERMITTED to cover eligible business operating expenses.
4. The subject property must be a minimum of 51% Owner Occupied and meet all other eligibility requirements of the SBA 504 program.
5. For Refinance-Only projects, the maximum LTV is 90%.
6. The refinance is applicable to conventionally financed commercial debt. Contract for Deed refinances are eligible! Existing government financed loans such as 504, 7(a), and USDA loans cannot be refinanced under this new program.
If you’d like to request a more personalized training session for your staff please contact your MBFC Business Development Officer at 800-593-0123 to schedule.
MBFC recently awarded a grant to the Southeast MN SBDC in Rochester. Michelle Mueller, Vice President-MBFC presented the check to Julie Kiehne, Regional Director SE MN SBDC.
Kiehne said they plan to use the funds as part of meeting a local match required to leverage funding for small business consulting services in Southeast MN. This in turn provides professional business consulting, technical assistance, and access to capital to help small businesses succeed and positively impact the economy in their region.
The SE MN SBDC serves 11 counties in Southeast Minnesota and is located on the campus of Rochester Community and Technical College. Businesses within the population served are typically under $6 Million in annual sales and have less than 500 total employees.
Also, the SE MN SBDC was chosen as Minnesota’s 2015 Excellence and Innovation SBDC Center of the Year by The U.S. Small Business Administration Minnesota District Office.
Contact MBFC’s President & CEO, Tom Saehr, for more information about the MBFC grant program.