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Down Payment Requirements
Existing business 10%
Start-up business or single purpose building 15%
Start-up business and single purpose building 20%
Eligible Businesses
The borrower must be a for-profit business whose business net worth is less
than $7 million and after tax income is $2.5 million or less on average for
the last two years.
Occupancy Requirements
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Initial Occupancy |
Occupancy after 10 years |
Existing Building |
51% |
51% |
New Construction |
60% |
80% |
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When a tenant will not vacate some or all of the space to be occupied by the
small business, the 504 loan may close if there is no more than one year
remaining on the lease.
Lender / Bank's Role
The partner bank processes their portion of the project financing based on
their credit policy and procedures. Typically, the partner bank will share
financial information with DCDC. The bank will initially fund all of the
project financing in two separate loans. The portion of the loan which they
keep, also known as the permanent loan, and the 504 portion of the project,
also known as the interim or bridge loan. Once the business occupies the
property, a second closing will occur with the 504 loan. At that time, the
504 loan will fund the interim bank loan.
At the 504 loan closing, the bank must certify it has issued all of the
interim loan funds, certify there have been no adverse change in the
borrower's financial condition and agree to provide 60 days notice of
default or foreclosure proceedings.
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