SBA 504 program: higher funding, speedier approval

More money and speedier access to it that's what the federal government promises in its revisions to the Small Business Administration 504 program.

The SBA 504 program provides financing for small business commercial real estate.

For fiscal year 2005, the feds have $5 billion in the national pool to fund the loans, says Bobbi Bennett, Reno-based president of the Nevada State Development Corporation, a firm certified to arrange SBA financing.

"We're excited," says Bennett.

The SBA 504 loan revisions increased the amount allowable per loan in the standard 504 loan category to $1.5 million from $1 million, and in the category of loans meeting regional or federal economic development goals, the possible amount was raised to $2 million from $1.3 million.

In addition, an entirely separate category was created for small manufacturers, says Bennett, making them eligible for $4 million in SBA loans.

Real estate prices are going up, and the SBA is responding to that, she says.

And what are small businesses hereabouts buying? "We're financing more office condos than ever before," says Bennett.

She estimates that the small business community's urge to own real estate is driven by the comparability between rent and mortgage payments.

Some continue find they save money by buying rather than leasing.

She points to a big demand in northern Nevada for office space of 3,000 to 4,000 square feet."But we also run the gamut," she adds, from loans for big warehouse space to commercial conversions of residential units.

The higher cap on the loan amounts are in place as of Dec.

8.

But equally exciting, says Adrien Burney, NSDC loan officer, is the SBA's new, faster processing of loan applications.

"What did take weeks now takes three days on average," she says.

Forms have been updated, processes streamlined, and now all applications go directly to Sacramento.

The old perception that an SBA 504 loan is slow, says Burney, is out of date.

Since fall of 2004, SBA 504 loans have been processed within the week.

In 2004, NSDC stood 16th in the nation out of 260 certified development corporations in number of loans approved.

It gained approval for 134 Nevada small businesses, amounting to upwards of $61.9 million.

Out of those, 50 were for northern Nevada businesses, amounting to $17.2 million.

And for the first three months of the current fiscal year, which began Oct.

1, NSDC has obtained approval for 24 Nevada loans, adding up to upwards of $10.5 million, eight of those in northern Nevada, adding up to more than $2.9 million.