The Process

The Process

Team Approach

  • You will have an experienced team working with you! BFG’s experienced loan officers will work with your conventional lender to collect and share the application information (Click here for an application and a checklist of information)
  • Once a completed application has been received, our team of underwriters will prepare the analysis for our loan committee. We will also share that with the bank to simplify their process. Our loan committees meet weekly, and the internal approval process takes about 10 days.
  • Once our loan committee has approved your application, we insert the bank’s commitment letter or term sheet in the SBA application package. Our package cannot be shipped to SBA without the bank’s letter, an executed real estate contract (or letter of intent signed by all parties), bids for any construction, renovation, or equipment, and current financial information.
  • SBA needs 5-7 days to review and approve your application. Once SBA has issued an approval, you will receive an “Authorization for Debenture Guarantee” which outlines the terms of the 504 loan. After you have signed the Authorization, it is provided to the bank.
  • The bank will conduct the initial loan closing allowing you to acquire the assets. If there is any construction or renovation involved, the bank will disburse those funds and monitor the work. If there is no construction or renovation work, we can close at the same time as the bank.
  • Once all work has been completed, all the funds have been disbursed, and an occupancy permit has been issued (you have moved in), the 504 loan closes. Our closing team (a total of seven SBA designated attorneys and four internal staff allow us to handle a large volume of closings) works closely with you and the banker to assure a complete funding package. The closing documents are circulated to the proper parties for inclusion in the next bond funding. It generally takes 30 to 45 days from closing to funding. The bank will receive a pay down from the funding, and you will then have two permanent loans – one to the bank and one to BFG. Our interest rate is set two days before the bond sale.
  • Over the life of the 504 loan, our Servicing Team will contact you periodically to collect year-end financial statements or tax returns, verify that the property is insured, and conduct site visits. Additionally, that team is also available to assist you with questions or changes that might be needed (easements, ownership changes, etc.)

Why 504 - 504 FAQ - Diagram