SBA Interim Loans
The Interim Loan Program offered by Business Loan Capital (BLC) is to be used strictly as part of an SBA 504 transaction. The nature of the SBA 504 program requires that the 1st TD lender provide specific documentation regarding the funding of their transaction, which delays the SBA financing by 45-90 days after closing. As a result, an interim loan is necessary to accommodate an efficient closing. Interim financing is provided with interest only payments, for 90 days, and will be replaced by the SBA 504 Debenture upon funding of that loan.
Typical Project Structure
• 50% LTV Conventional 1st Deed of Trust/Mortgage
• 40% Interim Loan to be paid off within 90 days by SBA/CDC 2nd Deed of Trust/Mortgage (35% for special use)
• 10% Equity Injection (Additional equity injection may be required for special use or start-up properties)
Maximum Interim Loan Amount
• $5,000,000 2nd Deed of Trust/Mortgage when meeting the job creation criteria, community development goal
• $5,500,000 2nd Deed of Trust/Mortgage for small manufacturers or for meeting SBA’s energy savings goals
Maturity and Amortization
• Interim Note – Up to 90 day term with interest only payments
• CDC/SBA 2nd Deed of Trust/Mortgage – Up to 20 years
• Multi-Purpose Properties – Up to 90% LTV (50% Conventional 1st / 40% CDC/SBA 2nd / 10% equity injection)
• Limited or Special Purpose Properties – Up to 85% LTV (50% Conventional 1st / 35% CDC/SBA 2nd / 15% equity injection)
SBA 504 Eligibility & Eligible Use of Proceeds
Please see the SBA 504 Loan Program Overview for this information.
Rate Option / Fees
• Interim Loan Rate – 7.00% to 9.00%
• Interim Loan Fee – 1% to 2%
• Concurrent Closing is mandatory (Execution of 1st TD, Interim, and SBA loan documents at closing)
• Minimum FICO of 650
• All requirements of the SBA/CDC must be met before closing.
• All other underwriting requirements mirror that of the 1st TD loan and SBA/CDC