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V O L . X X V I I N O. V I I A P R I L 5 , 2 0 2 1 28 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 Another plus: e SBA provides fixed interest on the loan for 20 to 25 years on real estate and 10 years on equipment, which compares favorably to bank loans, which generally have shorter terms and the potential for increased interest rates when the term resets. Granite State averages 50 to 70 loans in Maine and 250 to 300 in New England per year through the program. In February, Granite State partnered on 10 projects approved by the SBA, including a marina in Lebanon, a Mexican restaurant in Kittery and a tire recycling company in Fairfield. Total proj- ect costs ranged from $235,000 to nearly $9 million. e projects involved seven different banks. "We've done deals across the state — Presque Isle, Machias, Kittery, Bethel," says Collins. "It's driven by the banker. A lot of borrowers have great relationships with their banks, and when banks recognize an oppor- tunity, they bring us in." Brewery equipment Loans in recent months include borrowers from the hospitality, convenience store and manufacturing sectors. "I'm working on a couple of manufacturing busi- nesses now," Collins says. "e majority of deals I work on are real estate. A few deals each year are just equipment. A lot of those are breweries, because it's usually a large dollar amount for an equipment- only request." One of those was Mast Landing Brewing Co. in Westbrook. Owner Ian Dorsey needed more tanks to ferment yeast and to turn the initial brew into www.bowmanconstructors.com 207.368.2405 University of Maine Innovations Center - Orono,ME With over 30 years of commercial construction experience, the team at Bowman Constructors will help bring your vision to life! Let's Connect! » C O N T I N U E D F RO M P R E V I O U S PA G E 504 FUNDAMENTALS MAINE 504 LOAN VOLUME AVERAGES BY THE NUMBERS S O U R C E : Granite State Development Corp. S O U R C E : U.S. Small Business Administration S O U R C E S : SBA / Southern Maine Finance Agency FY 2019 59 LOANS FY 2020 66 LOANS 10/20–2/29/21 27 LOANS FINANCING: Up to 90% ELIGIBILITY: For-profit, net worth up to $15 million, net profit up to $5 million OCCUPANCY: 51% for real estate acquisition; 60% for new construction MAXIMUM LOAN AMOUNT: $5 million; $5.5 million for manufacturing or certain energy efficiency projects TERMS: 10, 20, 25 years RATES: (March 2021) 2.498%–3.205% $250K $0 $500K $750K $1M $1.25M $415K $978K $490K $1.11M $251K $585K Avg. CDC Avg. Third Party ELIGIBLE PROJECT COSTS Hard Costs Land/Building $500,000 Renovation $400,000 Equipment $50,000 Soft Costs Title Charges $3,500 Recording Taxes $15,000 Appraisal $3,500 Environmental $3,000 Architect / Engineer $15,000 Bank points $10,000 TOTAL PROJECT COSTS $1,000,000 Conventional Financing Bank Loan (80% hard costs) $760,000 76% Borrower Contribution: 20% of hard costs $190,000 19% 100% of Soft Costs $50,000 5% TOTAL SOURCES $1,000,000 100% 504 Financing Structure Third Party Lender $500,000 50% 504 portion $400,000 40% Borrower Contribution $100,000 10% TOTAL SOURCES $1,000,000 100% Borrower Savings With 504: $140,000

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