8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 1/12

Refinance Guide

SBA 504 FMPP

Loan Program

June 04, 2011

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 2/12

R

efinance Product Eligibility

Can you answer Yes to all the following questions?

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 3/12

R

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?

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 4/12

R

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?

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 5/12

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?

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 6/12

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.

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 7/12

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

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 8/12

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

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 9/12

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

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 10/12

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

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 11/12

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

8/3/2019 SBA 504 FMPP Loan Program - 6.4

http://slidepdf.com/reader/full/sba-504-fmpp-loan-program-64 12/12

Contact Us

Contact someone at CH Capital Partners, LLC if you have

any additional questions or need assistance with your

loan request:

CH C apital Partners, LLC 

(503) 640-5200

(877) 257-0865