News

25 Year Debenture Now Available

SBA announced the availability of a 25 year maturity for 504 loans. This is in addition to the 10 and 20 year 504 loans that are currently available in the 504 Loan Program.

About the 25 year debenture:

- This new 25 year 504 Debenture is available for 504 projects that are approved on or after April 2, 2018

- The term of a 504 Debenture for any 504 project approved prior to April 2, 2018 may not exceed to 25 years

- The voluntary prepayment schedule will stay at 10 years for the 25 year loans, the same as for the 20 year loans

- The term of the Third Party Loan accompanying a 25 year 504 loan must be at least 10 years

- The fee structure is the same as for 20 year loans and debentures

- Rates for the 25 year debenture are determined at the time of funding and are anticipated to be set at a spread above the 20 year debenture rate. Actual rates will not be known until the debentures are presented for sale. SBA expects to offer this debenture funding monthly

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Historic Low 504 Loan Pricing and Mitigated Risk

Most people would agree, when prices are good it is a good time to buy. For the month of September, the effective rate on 504 loan is 4.08% fixed for 20 years and 4.28% fixed for 10 years.butik dershane Rates have been consistently good for several months, yet these are the best rates we have seen in years.

The 504 loan product has been a main stay in economic development through fixed asset financing for years. The reason for it's success can partly be attributed to the key advantages it offers both borrowers and lenders.Ankara Dershane

The key advantages it offers borrowers include a low down payment, a low fixed rate (thus a hedge against rate fluctuations) and the inclusion of most soft costs. For the lender, the 504 loan product offers limited credit and concentration risk while still meeting their customers' needs. In addition,veri kurtarma  Wakarusa Valley Development will shoulder the underwriting and packaging of the loan!

Given these advantages and our current economic cycle, low pricing and mitigated risk go well together, don't you think?hazır ofis If you have a prospective project, give us a call. Let's keep our momentum in moving our community forward.

 

SBA Life Insurance Requirements

Although obtaining life insurance on the primary business owner may be a credit issue, generally SBA requires some type of life insurance coverage on all SBA loans.

Credit decision aspects include:
-  Is the repayment of the loan depended upon an owner's active participation in the business? If yes, life insurance is required
-  Are there other sources of repayment or adequate collateral available? If yes, life insurance coverage may be waived or coverage can be less than the loan balance
-  If the owner dies and there is not adequate life insurance coverage, and there is a loan deficiency, SBA may repair / deny payment of the guaranty

The lender must:
-  Obtain a collateral assignment identifying the lender as an assignee with the assignment acknowledged by the home office of the insurer
-  Assure the borrower pays premiums on the policy
-  Have a copy of the life insurance policy
-  Include insurance requirement and amounts in credit memo and keep in file

If a lender makes the decision not to require life insurance, the file must be documented with the decision outlining why the lender does not believe life insurance is necessary and / or how the lesser amount was determined.

 

7(a) General Information

The SBA 7(a) loan program is the most basic and flexible SBA financing option for small businesses. Loan proceeds can be used for a number of uses including working capital, equipment purchases, and the refinance of eligible debt. The highlights of the program include but are not limited to the following:

-  Guaranty percentages are based on the loan amount. The SBA will guarantee up to 85% of a loan for $150,000.00 or less and up to 75% of a loan greater than $150,000.00

-  Interest rates are negotiated between the borrower and the lender but are subject to the SBA maximums, which are pegged by the Prime Rate.

-  Loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful like of the assets financed.

-  To offset the costs of the SBA's loan programs to the taxpayer, the Agency charges lenders a guaranty fee and servicing fee for each loan approved and disbursed. The amount of the fee is based on the guaranty portion of the loan.

Wakarusa Valley Development will prepare and package 7(a) loan applications on behalf of your bank and customers and work directly with the SBA through the approval process. Once approved the participating lender will close, disperse and service the loan.

Put our experience and knowledge of the 7(a) program to work to help meet the needs of your customers while enhancing your lending opportunities!

 

Keep 504 In Mind

Despite the winter weather, there is nothing gloomy about the direction of the economy. As small businesses look at their options, keep the 504 Loan Program in mind. It is an outstanding product in the long-term stabilization of the economy.

Please do not hesitate to call us to brainstorm and discuss loan structure or see if a project may be eligible for the 504 Debt Refinancing Program. We love talking shop. As an added value we will be glad to meet with you and your customers early in the loan assessment process to explain the 504 program and answer any questions they may have.

 

Celebrating 30 Years of Servicing our Community

That's right! In 2016 Wakarusa Valley Development will celebrate 30 years of service. Our SBA loan programs and services have helped countless lenders provide credit to qualified borrowers while mitigating participating lender risk with the 504 and 7(a) loan programs. We have seen many changes in the lending landscape over the years, but one thing stands out above all others - We are still here servicing our local community.

As we move through our 30th year, our goals remain the same: to make your lending life easier through the SBA solutions and services we provide. Feel free to give us a call or send us an email. We love to hear your feedback, answer questions or discuss what we can do for your next client!

 

Take the Mystery Out of the 504 Loan Program

Small businesses, the backbone of our economy, are moving and shaking again and the 504 Loan Program remains one of the best financing tools available to them. That being said, we do understand the 504 Loan Program can seem a bit mysterious at times. Wakarusa Valley Development is here to clear the mystery! Whether you are new to the SBA 504 Loan Program or just need a refresher, we are your resource for information.

Here are just a few ways to utilize us as your 504 Loan resource:
- Visit us at our website for program information, rates, forms, calculators, FAQ's and more
- Call us to schedule a brief presentation to you and your colleagues. We will travel to you and put together a tailor-made presentation for your group or organization
- Invite us to meet with you and your customer to discuss the 504 Loan Program as an option
- Call us for a Wakarusa Valley Development 504 Loan Pricing Sheet for you to present to your customers
- Simply give us a call or shoot us an email with any questions

We offer all of the above services as an added value to you free of charge. So what are you waiting for? Let us get to work for you!

 

Changes to the fee structure for Fiscal Year 2016, effective Oct 1, 2015

Each year the SBA reviews the fees payable to SBA by 7(a) Lenders, Certified Development Companies, and borrowers to determine if they are sufficient to cover estimated costs of the 7(a) and 504 loan programs.

SBA has announced the following reductions for SBA's FY16:

For 7(a) loans greater than $150,000 approved in FY16 the following has changed:

- The on-going guaranty fee or annual service fee is reduced to 0.473 percent (47.3 basis points) of the guaranteed portion of the outstanding balance of the loan.

- The upfront guaranty fee will continue to depend on the loan amount and the maturity of the loan (unchanged from FY15).

- For loans with a maturity that exceeds 12 months, the applicable guaranty fees remain:
        - For loans of $150,001 to $700,000 :  3% of the guaranteed portion
       - For loans of $700,001 to $5,000,000 : 3.5% of the guaranteed portion up to $1,000,000 PLUS 3.75% of the guaranteed portion over $1,000,000

- For loans with a maturity of 12 months or less, the guaranty fee remains 0.25% of the guaranteed portion.

For 7(a) loans in the amount of $150,000 or less approved in FY16 there are no changes from FY15.

- Both the annual service fee and the upfront guaranty fee will be zero. Since the fees charged to the lenders will be zero, lenders may not assess a guaranty fee to the borrower in connection with these loans.

- If two or more SBA guaranteed loans are approved within 90 days of each other, the guaranty fee is determined based on the aggregate amount of the loans. This represents no change to current policy. Thus, if the total amount of multiple loans approved within 90 days is greater than $150,000 the normal fees apply.

As a reminder - WVDI will package the 7(a) loan guaranty application and will work directly with the SBA through the approval process. Once approved, the participating lender will close, disburse and service the loan.

For 504 loans approved during FY16 the following has changed:

- The one-time guaranty fee that SBA is authorized to charge to 504 borrowers has been reduced to zero in FY16. The annual fee is reduced to 0.914% (91.4 basis points) of the outstanding balance of the loan.

Please let us know if you have any questions or concerns regarding these changes. Let our experience and knowledge of up-to-date SBA requirements help you meet the needs of your customers quickly and enhance your lending possibilities.

 

 

Congratulations Will Katz!

Wakarusa Valley Development board member, Will Katz, was recently announced as the 2015 State Star! Will is the regional director at the Kansas Small Business Development Center (KSBDC) at the University of Kansas. The State Star is an award given to those who demonstrate excellence in work performance, initiative and creativity that results in improved operating efficiency and exceptional assistance to clients. Well done, Will!

Not all of our business partners just lend money, we have a wide variety of partners including appraisers, accounts, real estate brokers, economic developers, environmentalists, and small business development centers, just to name a few.

If you are interested in becoming one of our business partners please contact us!

 

Small Business Market Update

The SBA recently released its Small Business Market Update for June 2015. The report shows that small businesses (firms with 1 - 499 employees) are continuing to add more net new jobs than large businesses (firms with 500 + employees). Firms with 1 - 49 employees have contributed the most to job growth recently.

To read the full report click here.

Currently, Wakarusa Valley Development has helped fund 153 small businesses with an SBA 504 loan totaling more than $53,600,000.00 in debentures! In return those businesses have created 1,708 jobs. We continue to assist our borrowers and lenders, new and old, through the 504 and 7(a) Loan Programs.

 

504 Interest Rates

20 Year Rates

October 5.49%
September 5.25%
August 5.31%

10 Year Rates

September 5.25%
July 5.30%
May 5.30%

* Interest rates may vary.

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