In difficult times 7th SBA 504 and SBA programs are normally Reply

Currently we are seeing rates of decline, literally 90%, the banks here in Michigan. That means that 90% of all loan application commercial ports are available in banks are turning down. 50% - 60% of these mortgages commercial potential, probably a sense from the standpoint of traditional subscription, but banks are not willing to take the risk of losing continue to accumulate and take their toll. Several local banks to national and smaller have simply stopped quoting rates and will not accept proposals for new loans altogether. A particular bank here told all of their officers, commercial loan that the bank will not close a mortgage commercial single in 2008 - like it or not.

Borrowers must for commercial mortgages are not, of course, is gone and probably increased as the sight of business for a way to consolidate debt, launch new marketing programs, etc., in an attempt to pass current " cycle. " Holders are definitely starting to feel the pinch and are looking at all option that may not have been considered only a few months ago. All in all lenders are relearning the old "golden rule" that seemed to be gone for many years - that "he who has the gold makes the rules."

SBA commercial mortgage programs may be the answer for many business owners. Because the government guarantees a large portion of the loan becomes a much safer loan for the bank. For example, the SBA 504 program, the government essentially guarantees 40% of the loan so the lending bank is very conservative value of 50% (the borrower puts in 10%). In the seventh SBA program, Uncle Sam essentially guarantees 75% of the loan, making this a solid option for the lender as well.

However, from the standpoint of the borrower of these loans are not perfect. A major criticism is the lack of refinancing options. Companies must be in a mortgage that is about 2% above the market to qualify for a refinancing and cashing out portions are heavily controlled. Furthermore, the program only allows 504 purchase transactions so that the borrower must generally "swallow" the terms 7a or may need to go forward without refinancing.

The seventh program was shunned by many for 2 main reasons 1. The guarantee fee, pay attention to the SBA (on the loan) is expensive at 2.75%, 75% of the total balance of the loan and 2. That the rate floats above the first, adjusting once a quarter. The variable component, which can be a very scary proposal for the owners of the business, was the biggest problem.

It pays though to be informed. Not all SBA lenders are the same. For example, we work with banks that allow 2 7th refinance up to 90% loan to value and lock the rate for 5 years and the bank absorbs the 2.75% guarantee fee ... Make this one of the strongest programs in the nation.

The SBA program is likely to remain in the shelter of the mortgage business Wall Street goes through the restructuring of the CMBS and CDO markets, which will undoubtedly be painful for all involved .......