SBA Loans Get Easier

It's no secret that SBA financing helped fuel the small building-for-sale market during the real estate recession. (When there was no one else, SBA was there, just like your mom or insurance agents in commercials.) Just in time for National Small Business Week (May 12-16), two rule changes mean more businesses can qualify for SBA 504 loans.

Yesterday, we chatted with TMC Financing SVP Ron Coomes (showing us how enthusiastically small businesses are greeting the news). Ron says the US SBA eliminated two key requirements, including the personal resource test. This means that higher net worth individuals can participate in the SBA 504 loan program. Before, business owners were disqualified if they were overly liquid by having too much cash or marketable securities. The SBA also eliminated the nine-month rule (you hear that babies? that's called being flexible with deadlines); while still open to interpretation, it's expected to allow businesses to apply more of their project costs toward their loan down payment.

Ron secured $3.7M in SBA 504 financing for Brentview Medical's new Urgent Care and Walk-In Clinic, 8264 Santa Monica Blvd and 1055 Harper Ave in West Hollywood. As an SBA CDC (certified development company), TMC is the No. 1 provider of 504 loans in NorCal and No. 2 in SoCal in terms of dollar volume, having provided over $7.5B to more than 4,500 businesses over the past 30 years. The 504 program focuses on job creation, financing up to 90% of small and medium-sized businesses' commercial real estate (acquisition, renovation, construction) and long-term equipment. (After this picture was taken those scissors were used to cut Paul Bunyan's hair.)

Also, Ron tells us a "green debenture" program is gaining popularity among SBA borrowers. "It's really the secret to unlimited SBA financing." The green program allows businesses that either produce or reduce 10% of their energy use to acquire new real estate without regard to the SBA's $5M loan cap. Ron lives in the epicenter of a reinvigorated Hollywood—above, he pays homage to one of his favorite stars on the Walk of Fame. He leaves his car in the garage and takes Uber everywhere. (Except Trader Joe's, located just downstairs.)