SEED Extends SBA 504 Silver Promotion

FOR IMMEDIATE RELEASE

13 June 2008
Tamarah Barao
508-822-1020

The South Eastern Economic Development (SEED) Corporation announced today the extension of its SBA 504 Silver Promotion to June 30, 2008 to celebrate 25 years of excellence in lending.  The special promotion offers the lowest possible interest rate of 6.5% percent fixed for 20 years on SBA 504 loans for small businesses purchasing or improving buildings and/or purchasing machinery and equipment. 

In addition to the long-term low fixed interest rate, the promotion includes:  up to 90% financing; no upfront deposit until June 30, 2008; all eligible costs are rolled into the loan; 24 hour pre-qualification on a loan; no application form to fill out; and the availability of other small loans up to $100,000 at 5.9 percent fixed for working capital.

“SBA 504 loans enable small businesses to grow and create jobs by making it easier for them to finance the purchase, construction and improvement of buildings for their use, and purchase machinery and equipment with a life of 10 years or more,” explained Gooch-Smith.  “Often the cost of financing real estate with an SBA 504 loan is less than the cost of leasing,” added Gooch-Smith.

According to Gooch-Smith, under the SBA 504 Program, SEED can provide up to 40 percent of the financing needed behind a participating bank.  SEED’s portion can range from $80,000 to a maximum of $2 million for most small businesses, and $4 million for manufacturing businesses. SEED can get involved in small business real estate projects ranging from $200,000 to $10 million or more.

This past year, SEED approved and closed on 111 SBA 504 loans to businesses ranging from manufacturing to restaurants, motels, day care centers, car washes, professional offices, car dealers, gas stations, and others.

“Small businesses create most of the new jobs.  The bottom line for us is assisting small businesses which are going to create jobs and have a positive impact on the economy of our region,” added Gooch-Smith.

Under the SBA 504 Program, SEED works with the small business’ bank which is providing a first mortgage for a building purchase, construction or improvements, or financing machinery and equipment.  A loan request can come from a bank or a small business.

On a typical $1 million project, for example, the bank provides $500,000 (50 percent) on a conventional basis.  SEED provides the next $400,000 (40percent) for 10 or 20 years at a fixed interest rate below market, and the small business contributes 10 percent.

According to Gooch-Smith, the major benefit of the SBA 504 Program is that it enables a small business to keep more of its cash for operations by providing: a low fixed interest rate for the long term on 40 percent of the total project cost; a lower down payment of 10 percent; and the ability to finance the soft costs related to a project.

SEED Corporation is a non-profit economic development organization certified in 1982 by the U.S. Small Business Administration.  Under various programs, SEED makes loans from $5,000 up to $4 million to assist small businesses to grow and create jobs throughout the region.

This past year, SEED made 143 small business loans totaling $47.7 million, leveraging another $69.4 million in bank financing and private funds, and assisting in the creation of 785 new jobs.

SEED also provides business assistance and works with other economic development organizations and financing institutions in the region to ensure that individuals who are committed to owning and operating a small business are able to obtain the assistance they need to be successful.

For more information about the SBA 504 Program and other SEED loan programs, please call 508-822-1020 or visit SEED at www.seedcorp.com.

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