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Strengthen Your Collateral Position with SBA 504 Financing - BLP - Business Lending Partners

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Strengthen Your Collateral Position with SBA 504 Financing

If you’re looking to strengthen your collateral position, the Small Business Administration (SBA) 504 program can be a valuable tool. Through recent updates, the SBA has made it easier for borrowers to secure additional collateral while keeping their SBA loan structure intact.

With a standard SBA 504 loan, as the lead lender, you automatically benefit from a 50% Loan-to-Value (LTV) ratio. However, what many might not know is that the SBA now allows you to lower your LTV below 50% by adding additional collateral—without requiring that same collateral to secure the SBA loan itself. This is a significant shift from the old rules, where the collateral securing the SBA loan had to match the value of the SBA note.

What Does This Mean for You?

1. Stronger Collateral Position:

By including additional collateral, you improve your loan’s security, which can make it easier for your business to get the financing it needs.

2. More Flexibility: Borrowers now have the flexibility to offer collateral that isn’t tied directly to the SBA loan’s long-term note, providing greater options for managing your assets.

3. Great for Startups: This is especially helpful for startups, where a covenant can be used to release extra collateral once the business achieves stable cash flow, easing the financial strain early on.

If you’re looking to take advantage of this opportunity, the SBA 504 program, with its updated rules, is a great way to improve your collateral position while benefiting from long-term, low-rate financing. Let BLP help you navigate these changes and find the right financing solutions for your business.

CONTACT US FOR YOUR BUSINESS LENDING NEEDS

Brittany Helf

Vice President & Loan Officer Northern Wisconsin

Brittany Helf started her banking career 12 years ago as a part-time teller at Southern Illinois University-Edwardsville and later found her passion for lending and business development with Business Lending Partners.

Brown County Office618.567. 8709 Brittany@blp504.org

Wesley Walsh

Vice President & Loan Officer Southern Wisconsin

Wesley Walsh is a commercial lender passionate about helping small businesses. A Magna Cum Laude graduate of UW-Eau Claire, he’s interned at Associated Bank and worked at Tri City National Bank.

Racine Office262.898.7436 Wesley@blp504.org