Greater New York Development Co.  a Division of Long Island Development Corporation, is a regional economic development, not-for-profit corporation which makes long term, affordable loans to small businesses and not-for-profit entities.  

GNYDC Closes First
Connecticut 504 Loan!
   
 

GNYDC is pleased to announce the closing of its first SBA 504 deal in Connecticut. The project , located in Milford, Connecticut provided subordinate financing for Metroplitan Dental Laboratory to expand its facilities from 2500 to 4800 square feet, adding ten new jobs to its existing workforce. MORE

  

NJ Truck Parts Distributor/
Maintenance Company Expands
   
 

Ace Drive Products is a ten+ year old distributor of truck parts, also providing repair services for large trucks and tractors. Originally located in less than 30,000 square feet in Elizabeth, NJ, the company has relocated to a 41,000 sqft facility, also in Elizabeth.  MORE

  

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Return to Basic SBA 504 Information
SBA 504 LOAN FACTS
 
Loan Amount: Up to 40% of project-maximum $1.5 million except maximum $2.0 million for
Public Policy project, empire zone, expand exports, minority businesses, women-owned and veteran-owned businesses, maximum $4.0 million for manufacturers.
Eligibility: Small business concern… net worth under $7.5 million; net profit after taxes under
$2.5 million. Must be for-profit - retail, service, professional service, wholesale, manufacturer. No religious institutions. No speculative/lenders. No offshore facilities. One new job projected for every $50,000, over a two year period (for manufacturers one new job for every $100,000) with exceptions. Multiple small business concerns may join together for a project.
Use of Funds: Capital Assets
HARD COSTS: Acquire land; construct building; acquire building; add to building; renovate building; heavy duty machinery & equipment. Includes condominiums, co-operatives, leasehold improvements and commercial vessels.
SOFT COSTS: Architect; permits; attorney; accountant; interest and points on bridge loan; environmental; appraisal; real estate broker commission; title searches and insurance.
Terms: 10 or 20 years; self amortizing. Rate: Below prime, fixed at auction (upon project
completion).
Collateral: Subordinate to l" mortgage lender.
Conditions: Personal guarantees for each 20% or more owner or key management.
Other Financing: At least 50% from non-federal sources, (bank / nonbank / JDA / UDC / IRB).
Must have 7 year term (10 year loan); 10 year term (20 year loan). At least 10% injection from small business concern (may be land/building).
Special: Declining prepayment penalty 1st half loan term; permanent lender only; personal
resource test; start up (less than 2 years) 15% injection; special purpose building 15% injection; start up & special purpose 20% injection.
Fees: Approximately 4% of loan amount (includes GNYDC attorney and title insurance). These
fees are rolled into mortgage. No mortgage tax.
SBA Required Bank Fee: 1/2 of 1% of permanent first mortgage from bank. If added to fees on
bridge loan rather than on first, can include as part of project cost.
Owner User: 51% existing building; 60% new (can permanently lease out 20% on new
construction).
Ownership of Realty: Anyone can own (doesn't have to be owners of the small business
concern).
BENEFITS OF SBA 504 LOANS
FOR BORROWER:
FOR BANK:
  Low Down Payment: Lets borrower preserve cash for its working capital needs.
  Long Term: Provides longer payout for borrower, better for its cash flow.
  Fixed Rate on 504 Portion: Stability and planning for borrower.
  Rate: Very low for a second mortgage loan and when blended with bank rate, is very attractive deal for a small business.
  Fees: No New York Mortgage Tax.
 
CRA Credits.
Lower Loan to Value Ratios.
"Insurance": SBA 504 in Second Position.
Provides better cash flow and lower cash injection for borrower.
GNYDC handles all SBA application paperwork.
  Enables bank to offer longer term package than typically can.
  Enhances bank's lending limit.
  "Deposit Strategy": Increase bank's deposits from customer who put down less on building project.
 
  INTERESTED?
Call Roz Goldmacher at 866 433-5432

Greater New York Development Co. is New York's premier small
business lender for over 25 years and has made almost $1 billion
in direct loans to small businesses.

 
   
 

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