In mid 2012 I first met Joey Carpenter and Don Garrison of Nexan Building Products (formerly FSI Home Products) of Cullman, AL. Although not the owners of the company the two had run the business for the past ten years as if they were.
The founder of the company was absentee for the most part and was at a point in his career that he wanted to sell the business and focus on other endeavors. Although he decided to postpone the sale until late 2013 Alliance Capital along with our lending partner in this transaction were able to secure financing via both the SBA 504 loan program for the fixed assets and a 7(a) loan for the business assets. The fixed assets (land, building and equipment) were financed over a 20 year term while the business assets (inventory and accounts) were financed over a seven year term.
Nexan Building Products (www.nexaninc.com) has been one of the largest distributors of aluminum decking, railing and fencing in the country and have shipped their products around the world from their 105,000 SF Home Office / Warehouse in Cullman, AL.
We are proud to have helped these two young entrepreneurs secure financing using both the SBA 504 loan as well as the 7(a) loan program.
Are SBA Loans Less Attractive As Rates Move Up?
SBA Loans offer borrowers long term fixed rates that cannot be obtained through conventional bank or lending channels that business owners would generally see as the alternative. But with rates increasing are SBA loans still advantageous over conventional loans?
That answer is a resounding, yes! True, rates are moving up, but think about this. The SBA Loan programs do not have balloons so as a small business owner you manage your business, not your loan every few years. With terms out to 20 years on a 504 and 25 years on 7(a) loans and financing up to 90%, the time is still right for an SBA Loan to fuel your dream!
Alliance Capital continues to leverage our relationships to provide our clients the most efficient processing and competitive pricing available in the market. The SBA 504 rates for the month of January are as low as 4.65% for the ten year fixed rates and 5.53% for the twenty year fixed rates. These rates reflect the SBA or second mortgage side of the loan. The SBA 504 loan is a participating loan that allows up to 90% financing, the lender makes the first mortgage loan at 50% of the project cost and the SBA helps fund the second mortgage at up to 40% of the project cost. The first mortgage rate is set by the participating lender, while the second mortgage rate is a combination of the actual note rate and the applicable servicing fees. The SBA 504 loan is designed for the purchase, construction or renovations of owner occupied commercial real estate or the
purchase of equipment with a long useful life. Call today to take advantage of rates while they still remain at favorable levels. We all know this won't last forever!