Commercial financing for small business loans

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) October 6, 2009 -- The borrowing company, together with affiliates, must meet certain requirements in order to be eligible for the benefits of the 504 Loan Program:

* Business size: Net worth less than $8,500,000; net profit not more than $6,000,000 over the past two years
* Employment: Meets one of a variety of goals
* User of asset: Operating Company must be primary user
* Industry: Very few exclusions
* Massachusetts: All counties
* New Hampshire: Belknap, Cheshire, Hillsborough, Merrimack, Rockingham, and Strafford counties

* Rhode Island: Bristol, Kent, Newport, and Providence counties
* Vermont: Addison, Bennington, Chittenden, Rutland, Windham, and Windsor counties
* Connecticut: Hartford, Litchfield, Tolland, and Windham counties

The tangible net worth of the borrowing company, including affiliates and other companies under common control, cannot exceed $8,500,000. The average NPAT (net profit-after-tax) for the most recent two years (excluding loss carry-forwards) cannot exceed $3,000,000 per year. Stated another way, the total NPAT for the past two years cannot exceed $6,000,000. If this maximum is exceeded, alternative size standards may be used in certain instances.
Each project must meet at least one of a broad range of economic development objectives. An economic development objective is met if the project meets a community development goal or a public policy goal (as defined by the Section 504 Loan Program) or creates or retains one job for each $50,000 ($100,000 for manufacturing) of debenture assistance.

The asset being financed must be used by the operating company (or companies). Real estate must be owner-occupied as defined by the Section 504 Loan Program. There are two definitions of owner-occupancy, one for existing buildings and another for new construction:

* Existing buildings: The operating company (or companies) must not lease out more than 49% of the space

* Newly constructed buildings: The operating company (or companies) must initially occupy at least 60% of the available space and plan to commence expansion into the remaining space within three years such that it will occupy at least 80% of the facility by the end of the tenth year. In other words, up to 20% of the facility may be leased permanently to an unrelated third party.

Normally, owners of 20% or more of the operating business and/or passive real estate entity cannot have personal liquid net worth in excess of the total financing package. For example, if the total financing package were $1,500,000, each "20% or more" owner could not have more than $1,500,000 in cash and marketable securities. Real estate equity and retirement funds are not included in the calculation. For projects below $750,000, owners may have liquid assets above the project amount. Contact us for more details.

If you want to know more about us please visit: http://www.baycolony.org

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