Capital Access Corporation Kentucky

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Capital Access Corporation Kentucky

• SBA 504 Loan Program

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US Small Business Administration

• 504 Loan Program

• Fixed Interest Rates
• 10 or 20 year term
• 10 Borrower equity

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Purpose of 504 Program

• Assist healthy growing small businesses by
  participating with lending institutions to
  provide fixed-rate, long-term financing of fixed
  assets.
• To provide long term fixed-asset financing to
  eligible and healthy small businesses at a
  reasonable rate.

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Accessing the SBA 504 Loan Program

• Capital Access Corporation Kentucky will
  provide access to the SBA 504 Loan Program.
• Our geographic territory consists of
  Statewide

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Eligible Businesses

• Project located in our territory
• Business must be for profit
• Business net worth less than 7 million
• Average income for the last two years cannot
  exceed 2.5 million
• Initial owner occupancy standard 51 for
  existing building, 67 for new construction

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Eligible Projects

• Fixed assets such as
• Land and new building construction
• Existing building purchase
• Building renovation
• Machinery and Equipment

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Project Size

• Project (Amount)
• CAC Ky. (Amount)

• Minimum Maximum
• 120,000 Unlimited
• 50,000 1,500,000
• If a policy goal of SBA is met, CAC Ky.
  Loan can be 2,000,000

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SBA Public Policy Goals

• Rural Development
• Business District Revitalization
• Expansion of Exports
• Minority Business Development
• Woman Owned Business (51)
• Veteran Owned Business (51)

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Typical 504 Project

• Fixed Asset
• Lender
• (7 or 10 year minimum term)
• CAC Ky.
• (10 or 20 year fixed rate)
• Borrower
• Total Project

• 1,000,000
• 50 500,000
• 40 400,000
• 10 100,000
• 100 1,000,000

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Lender Loan

• If CAC Ky.s loan is 20 years, the bank loan
  must be at least a 10 year term. Real Estate
  Loans.
• If CAC Ky.s loan is 10 years, the bank loan
  must be at least a 7 year term. Equipment Loans.
• Rate negotiation are between bank and customer.
• Balloon payments are allowed

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Advantages to Lending Institution

• 1st Mortgage on property financed
• 50 loan to value
• Improved cash flow
• CRA Credit
• Capital Access Corp Ky. Works directly with the
  client

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Advantages to Borrower

• Conserve working capital 10 down payment
• Offset interest rate risk 40 of project tied
  to fixed rate
• Extended amortization provides lower monthly
  payment
• Improved collateral position for bank often
  results in more lending capacity for other needs
  and lower rates

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Rates

• Established at the time of the bond sale, after
  the project is complete
• Typically lower than conventional
• Fixed for the life of the loan!

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Predefined Prepayment Penalty

• Effective for first half of the loan
• For a 20 year note, starts at the note rate in
  the first year and decreases 10 a year for 10
  years
• For a 10 year note, starts at the note rate in
  the first year and decreases 20 a year for 5
  years
• Company incurs no penalty if prepays loan in
• - year 11 of a 20 year bond
• - year 6 of a 10 year bond

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Additional Program Specifics

• Personal resource test implemented
• Single purpose facilities required additional 5
  equity injection
• Start-up businesses require an additional 5
  equity injection
• Job Creation standard of 1 job created for every
  50,000 Capital Access Corp Ky. Lends must be
  met

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For More Information Call

• Capital Access Corporation-Kentucky
• 120 Webster Street, Suite 330
• Louisville, Ky. 40206
• [phone]