Experience

Illinois Business Financial Services

• United States
• Financial Services
• 1 - 100 Employee

• SBA 504 Loans and Economic Development in Illinois

  • 1981 - Present

  As an SBA-backed lender, IBFS - in partnership with America's Banks - works with qualified businesses to develop, package and process business growth projects. By integrating client, bank resource and SBA financing, IBFS helps businesses expand their operations. The SBA 504 is a long-term financing tool that offers fixed-rate financing to acquire major fixed assets for expansion or modernization. SBA 504 loans are backed by a 100% SBA-guaranteed debenture. Key benefits of an SBA 504 Loan to the clients: • Low down payment - conserves valuable operating capital and improves cash flow • Below-market fixed rates - no future rate fluctuation and predictable, low monthly payments • Long-term financing - promotes steady business growth Key benefits of an SBA 504 Loan to the banks: • Mitigation of credit risk - lenders have first lien position and typically a 50% loan-to-value ratio, minimizing collateral risk • Management of overall lending limits and industry exposure - with SBA 504, smaller banks can entertain larger projects and larger banks can limit their exposure to certain industries and/or to a particular borrower • Assist more customers - SBA 504 allows banks to spread the lending capacity across more borrowers and diversify default risk • Gain new customers - SBA 504 loan often becomes the basis of an entire banking relationship • Active secondary market - there is an active secondary market for SBA %)$ first mortgage loans again, so banks can reduce their exposure to nearly zero and enhance their non-interest income while retaining the customer's primary banking relationship • Strengthening of core earnings - pricing of the bank's portion of the SBA 504 loan is solely at its discretion • CRA credit - banks that participate in SBA 504 loans are eligible for Community Reinvestment Act (CRA) credit on certain projects Show less