5 Most Commonly Asked Questions by Bankers

While we encourage our lenders to reach out to us with any specific questions, we also realize that there are times when a quick reference or refresher of information could be of use.  We’ve taken a moment to compile the top 5 questions asked by our bankers regarding potential 504 loans.

  1. What is considered a new business? A new business is one that does not have at least 2 years of tax returns OR one that has a change of ownership that results in new/unproven management and increased debt unrelated to business operations.
  2. What is considered a special purpose property? The SOP outlines a list of properties that are considered special purpose.  This list provides guidance.  The Appraisal report will also provide a determination if the property is deemed special use.  Click Here to see the list provided by the SOP 50 10 5(k).
  3. What are eligible costs? Land purchased in connection with constructing a building, Construction & Renovation Costs, Short term financing (term of 3 years or less), interim loan fees, soft costs such as Permits, Architectural, Appraisal & Environmental reports, Furniture and Fixtures when minor to the overall project, and Equipment.
  4. Can Preferred Lending Partners accommodate a concurrent/simultaneous closing? Yes, typically we can.  This is one thing that we will discuss at the time of application so that appropriate expectations are set for all involved.  IF a concurrent closing is requested, we will collect during underwriting the documents, such as organizational documents etc., which are needed to prepare our closing documents.  Closing documents are reviewed by our SBA closing attorney prior to closing, which typically requires 3 business days.  It is most helpful if we can have 10 business days to prepare, review and finalize all SBA required closing documents.
  5. What is the latest interest rate? You can always call the PLP office for the latest funding interest rate, however it is updated on our website and social media accounts monthly.  We also suggest joining our monthly Interest Rate newsletter, which will also include updates that you need to know on the SBA 504 program or with PLP.

Link to SOP