Van Smith, president of the non-profit Central Texas Certified Development Company, can help local businesses grow.
“The credit crisis has not frozen the SBA (United States Small Business Association) 504 loan program and loans are still available for businesses seeking to expand through real estate acquisition, or adding on to their existing facilities, or needing to make large equipment purchases,” Smith wrote in a press release.
Smith said private banks continue to work with the SBA to make these loans work. And they’re not backing off.
“The CDC industry reports that virtually all lending partners using the 504 program are still actively lending on SBA projects to qualified, expanding small business borrowers who are creating new jobs, or retaining jobs in their communities,” Smith said.
Participating banks will typically loan 50 percent of the funds needed for the project. The money is secured with a first lien on the project assets that are being financed, so it is also a good deal for the lenders, Smith said.
Randy Schoel, president of Andersen Schoel Office Interiors in Harker Heights, said a SBA 504 loan helped him several years ago when his company came to a crossroad. To support the volume they wanted to produce, they needed to expand.
Back when Schoel and his wife opened the business, they invested their life savings and used personal credit cards. But this time, the CDC made it happen.
“Van Smith and the CDC are tremendous partners. They take our hands and walk us through the process,” Schoel said. “They make it as simple as can be. It’s a tremendous resource.”
Located in Temple, the Central Texas CDC was created in 1982 and is certified by the SBA.
According to the SBA, money from 504 loans must be used for fixed asset projects such as:
Purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping.
Construction of new facilities.
Modernizing, renovating or converting existing facilities.
Purchasing long-term machinery and equipment.
The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
