The Lender’s Role

The Lender’s Role

  1. Call BFG early in your process! Our loan officers will help work through eligibility and handle any concerns up front
  2. BFG and the lender can share the application information and financials
  3. BFG will provide our underwriting information to the lender
  4. Once we have an internal approval, we will need the lender’s term sheet or commitment letter in order to submit an application to SBA. Sample term sheet found here.
  5. When SBA approves the application, an Authorization (commitment letter) will be issued outlining the terms of the 504 loan.
  6. The bank will order the appraisal and an environmental (if required by the bank). See information on the requirements for those reports below.
  7. Once SBA has approved the appraisal and environmental, the bank can close its loan. The bank will lend both its permanent loan amount and the net 504 loan amount (the bridge or interim loan) and monitor any construction or renovation.
  8. Don’t forget to collect the ½% fee that is paid to SBA on the permanent portion of your loan!
  9. Also, don’t forget that the 504 closing is contingent on the borrower injecting the required equity! Requiring the borrower to inject the equity at the first closing simplifies the documentation and assures it’s contributed.
  1. As soon as the construction or renovation is complete, all the funds have been disbursed, and the borrower has received an occupancy permit, the 504 loan can close. Notify us about 2 months in advance of the estimated completion date so we can begin the closing process.
  2. Our closing team will request copies of your loan documents and the loan disbursement information. They will provide the Interim Lender Letter and Third Party Lender Agreement for your signature.
  3. Once the 504 loan has closed, it begins the bond funding process which normally takes 30 to 45 days from closing, and that is the point that the lender receives its pay down.
  4. Post funding, we will work closely with to assist with any changes required by the borrower (ownership, easements, etc.) or any loan work outs.