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SBA 504 Case Study

Healthcare Service Company Purchases Building for Expansion

Small Business Administration (sba) 504 Loan

The SBA 504 loan program partners with a financial institution to create an attractive financing package to benefit businesses. Working together with the SBA and Business Lending Partners, growing businesses throughout Wisconsin can receive affordable, long-term, fixed-rate financing to expand operations and create job opportunities.

A typical SBA 504 Loan (including the one in this case study) is structured as 50% from the bank at the bank’s rate, 40% from the SBA at a long term, fixed-rate, and 10% equity from the borrower.

50%
BANK
40%
SBA 504
10%
EQUITY

Minority-Owned Healthcare Service Purchases Building Previously Rented From

The purpose of this SBA 504 loan is to assist a local healthcare company to purchase its leased facility, giving the owner an extra 4,500 sq ft and 70% occupancy of the property. This allows the company to assist more customers, while maintaining quality service.

The company currently employs 35 full-time staff. As a result of project completion, they will create 15 additional jobs to support anticipated growth. Utilizing the SBA 504 Loan Program, in partnership with Frank Sterbin at Town Bank, this company found the ideal financing solution to meet their growing needs.

Frank Sterbin Wintrust Commercial Banking at Town Bank

It was a pleasure to work with Karmin and everyone at RCEDC."

FRANK STERBIN
-
Wintrust Commercial Banking at Town Bank

WHAT WAS UNIQUE ABOUT THIS LOAN? - Karmin Garstecki, Loan Officer

  • Borrower paid less than appraisal because seller recognized the community-based mission of the organization.
  • While not considered to be cashflow, rental income from tenants will cover proposed debt service.
  • Previous occupant operated similar service, minimizing expansion cost.

land and building purchase

Borrower has realized three years’ worth of consistent growth, identified and positively affected a growing need, and maintains financial means to acquire this SBA 504 loan. Financing will go towards purchasing the building, thus acquiring two tenants, whose rent exceeds the proposed debt service.

prioritization criteria

Company's location adds value to local economy

Benefit to a minority-owned business

job creation within a rural market

Contact Us with your business financing needs

Karmin Garstecki
Karmin Garstecki
Loan Officer
Karmin Garstecki is one of Business Lending Partners Loan Officers. Karmin conducts credit analysis and application processing for BLP. Karmin also assists in maintaining the Business loan portfolio. Karmin holds a BBA in Finance from the University of Wisconsin - Whitewater.
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