Mainebiz

V O L . X X V I I N O. V I I A P R I L 5 , 2 0 2 1 26 B A N K I N G / F I N A N C E / I N S U R A N C E F O C U S I t took about a year for the owner of AutoMile Motors to find property to buy on Route 1 in Saco. Justin "Jay" Gould and a partner were looking to have the security of ownership, rather than a lease, and also wanted to expand the auto dealership. e "AutoMile" brand meant the search was limited to just that — a mile-long stretch on Route 1 known for its automotive dealerships and services. "AutoMile Motors has to exist on the auto-mile," says Gould. Initially the partners looked at properties in the $300,000 range, an affordable price based on what they assumed would require a 20% to 25% down payment for a bank loan, with future upgrades paid for out-of- pocket when possible. He approached NBT Bank in Portland about financing. ere, Wayne Morphew, a senior business banking officer, recommended Gould apply to the U.S. Small Business Administration 504 program, which provides loans advantageous to borrowers for certain commercial purposes in combination with a regular bank loan. Morphew connected Gould with Paul Collins at Granite State Development Corp. in Portland. Granite State is a certified development company, a nonprofit that administers the 504 pro- gram on behalf of the SBA. Gould learned the 504 provides long-term, below- market, fixed-rate loans with a down payment as low as 10% — far lower than the 20% to 25% required by a conventional loan. at broadened his search. When a much larger 20,000-square-foot building on 1.69 acres popped up, the loan program made it possible for Gould to take on the $1.1 million price tag and also invest immediately another $200,000 in renovations to become a turnkey operation. "It allowed us to get into a million-dollar property with just 10% down," Gould says. "We're not big-money guys. So for guys like us, we only had to come up with $110,000 to start building our dream. is lowered the price of entry into the commercial real estate game." Building dreams Helping small businesses build their dreams is the goal of the SBA 504 program, thanks to long-term, fixed- rate financing for eligible projects. In the typical 504 project, a third-party lender — a bank or credit union — funds 50% of the cost with a loan secured by a first lien. An SBA-licensed certified development company, or CDC, funds 40% through a P H O T O / T I M G R E E N WAY Ian Dorsey, president and CEO of Mast Landing Brewing Company, left, and Paul Collins, vice president of Granite State Development Corp., at Mast Landing Brewing Company in Westbrook. Collins says the SBA 504 loan program provides great advantages to borrowers, like Dorsey, who recently bought more tanks, a pilot brewhouse, and more canning machinery in response to high demand. Debt relief A s part of the CARES Act, the SBA provides debt relief for 504, 7(a) and microloan borrowers, covering payments, princi- pal, interest and fees for six months if the borrower received a loan before Sept. 27, 2020. Additionally, SBA will make payments for a three- month period on new loans approved this year between Feb. 1 and Sept. 30. S O U R C E : U.S. Small Business Administration GOOD DEAL For small businesses, SBA 504 loans lower the price of entry to real estate B y l a u R i e s C h R e i B e R

• Cover