Mainebiz

W W W. M A I N E B I Z . B I Z F O C U S B A N K I N G / F I N A N C E / I N S U R A N C E 27 loan secured by a second lien. In most cases, borrow- ers provide the remaining 10%, although start-up and special-purpose projects require up to 20% equity. A 504 loan can be used for a range of assets, includ- ing purchase or construction of: Existing buildings or land New facilities Long-term machinery and equipment Or the improvement or modernization of: Land, streets, utilities, parking lots, landscaping Existing facilities In Maine, the loans are mostly used to buy, build or expand commercial real estate, says Diane Sturgeon, deputy district director of SBA's Maine District Office. e program requires a much lower down payment than conventional bank financing, allowing borrowers to retain more working capital for their business and providing predictable payments through the life of the loan, she explains. "Normally if you're doing a commercial real estate deal, the lender is looking for 20% to 25% cash down," she says. "For a million-dollar deal, that's a lot for a small business owner." 'I found property' Most deals start with the banks, explains Granite State's Collins. "e banks have a relationship with their bor- rowers," he continues. "e borrower says, for example, 'I found property I want to buy,' or, 'I need this piece of equipment,' or, 'e landlord is selling me the building we're in.'" Once it's determined the 504 is the right fit for the borrower's project, the CDC and the bank pursue sepa- rate underwriting processes. "I describe the process as the bank doing the credit analysis while we make sure the deal fits with SBA 504 loan program parameters," says Collins. Benefits for borrowers include the lower down pay- ment, which allows them to retain working capital. "at's the lifeblood of any business," says Collins. "at allows them to grow and continue to develop their business." NO OTHER LENDER WORKS FOR AGRICULTURE LIKE US. Loans & Leases Financial Record-Keeping Payroll Services Profitability Consulting Tax Preparation & Planning Appraisals Estate Planning Beginning Farmer Programs Crop Insurance Discover a lender that's 100% dedicated to serving your financing needs. Farm Credit East was Made in Agriculture. So along with specialized financial products and money-saving services, you can benefit from an entire organization dedicated to your business and people working for your success. Discover the difference. No other lender understands your business like Farm Credit East. C O N T I N U E D O N F O L L OW I N G PA G E » Diane Sturgeon, deputy district director of SBA's Maine District Office, says the 504 program requires a lower down payment than conventional bank financing, allowing borrowers to retain more working capital. P H O T O / U. S. S M A L L B U S I N E S S A D M I N I S T R AT I O N

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