Commercial Real Estate

June’s SBA 504 20-year effective rate is 5.29%.  10-year bonds are funded every other month so the next sale will be in July.  The May SBA 504 10-year bond effective rate was 4.61%.  (Rates may vary slightly based on approval date.)

On Thursday, June 3, our Executive Director had the opportunity to attend a Federal Reserve event in which the guest speaker was Federal Reserve Chairman, Ben Bernanke.  The article below highlights the event.

The second article is a repeat of the newsflash sent out last week.  At this time the SBA loan queue is still in place for projects seeking the reduced fees and additional funds have not been approved yet to extend the Recovery Act program.  It is anticipated that this will be approved by Congress in the next few weeks.

Fed Chief Speaks in Detroit

Thursday, June 3, Federal Reserve Chairman Ben Bernanke spoke to a group at the Federal Reserve Bank of Chicago’s branch in Detroit.  Mr. Bernanke’s speech focused on urging banks to do more for Small Business.

Mr. Bernanke stated that outstanding loans to small businesses declined to $660 billion in the first quarter of 2010, from almost $700 billion two years ago.  He wasn’t clear if this is a result of reduced demand or tightened credit standards.

Mr. Bernanke stated that in 2009 only 40 percent of small businesses that tried to borrower had all their needs satisfied.  As a result, he urged banks to examine loan applicants’ businesses thoroughly and to “avoid mechanical, automatic rejections” based solely on the companies’ industry, location or other negative factors.

Our Executive Director, Sandy Bloem, had the opportunity to attend the event held in Detroit. “I’m encouraged to see that the Federal Government is recognizing that small businesses are the engine that will create the new jobs in our economy, and that the owners are having challenges in getting access to capital.  Now is the time for Congress to continue their support for the SBA programs.”

To read the full article:

Fed Chief Urges Banks to Do More for Small Business

Loan Queue

Once again, funds provided by the American Reinvestment and Recovery Act have been exhausted and SBA has reactivated the loan queue.

As part of the Recovery Act enacted on Feb. 17, 2009, SBA received $730 million to help small businesses, including $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to reduce borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted on Nov. 23, 2009, and an additional $125 million was provided in December. Those funds were exhausted in late February. An additional $60 million was provided to extend the programs through March. SBA was authorized for an additional $40 million in late March, and an additional $80 million was provided in mid-April to support the programs through May 31.

A bill for extending the fee waivers is currently in front of Congress, however, it has not yet been passed by both the House and the Senate.

Please call EDF for any questions regarding the loan queue.

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736
TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com

Bradd Pierce
Loan Officer
bradd@growmichigan.com

Gary Witkowski
Relationship Manager
gary@growmichigan.com

May’s SBA 504 20-year effective rate is 5.52%.  10-year bonds were also funded this month, and the 10-year bond effective rate was 4.60%.  (Rates may vary slightly based on approval date.)

The first article below congratulates one of our existing customers; DornerWorks, Ltd.  The company was named one of the 50 companies to watch for 2010 at the Michigan Celebrates Small Business Awards!

The second article details the SBA ReadyTalk Session on May 6, 2010, offered by SBA’s Detroit District Office.  Details and directions are in the second article below.

50 Companies to Watch for 2010

We would like to congratulate one of our existing customers, DornerWorks, Ltd., for being named one of the 50 companies to watch for 2010.  The announcement came at the Michigan Celebrates Small Business awards in Lansing on April 29th.  DornerWorks financed a building purchase and renovation in 2007 using an SBA 504 loan with EDF.  This expansion helped create almost 50 jobs!

DornerWorks, Ltd is an engineering consulting firm located in Grand Rapids.  The company was founded in 2000 and provides expertise on embedded systems, for example, airplane flight controls or surgical tools where people’s lives could be affected by a system failure.

DornerWorks, Ltd has seen growth in recent years due to an expansion of their services to the medical markets.

Again, congratulations to DornerWorks, Ltd on being named as one of the 50 companies to watch for 2010!

SBA ReadyTalk Session

The next monthly ReadyTalk session for lenders is scheduled for Thursday, May 6 at 10:00 a.m. and will cover the following topics:

• Recovery Act update
• Lender portal presentation
• Updates on loan activity
• General Q & A

ReadyTalk is a Webinar program utilizing the Internet and a conference call system. To access the system:

From your computer:

1. Logon to www.readytalk.com

2. Login as a participant using the access code 3051501

3. Enter your name, email address, and company name as requested

From your telephone:

1. Dial 866.740.1260

2. Enter the Access Code 3051501 and press #

3. Say hello!

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736
TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com

Bradd Pierce
Loan Officer
bradd@growmichigan.com

Gary Witkowski
Relationship Manager
gary@growmichigan.com

April’s SBA 504 20-year effective rate is 5.77%.  10-year bonds are funded every other month so the next sale will be in May.  The March SBA 504 10-year bond effective rate was 4.60.  (Rates may vary slightly based on approval date.)

The 12^th Annual Michigan SBA Lender’s Conference was held on March 23, 2010.  It included several informative break-out sessions on SBA lending.  The conference also gave EDF the opportunity to honor our 2009 Lender of the Year, Brent Kehrwecker of Byron Bank.  A portion of the press release is below.

The second article details the next ReadyTalk Session on May 6, 2010, offered by SBA’s Detroit District Office.  Details and directions are in the second article below.

The last article is another reminder regarding the fee waiver extension through April.  A borrower has until the end of the month to obtain an Authorization that includes the fee waivers.

Lender of the Year

Economic Development Foundation (EDF) is pleased to announce Brent Kehrwecker, Second Vice President, Commercial Banking Loan Officer at Byron Bank, as their “Small Business Administration (SBA) 504 Lender of the Year”.  This award is given annually to a lender that shows leadership and resourcefulness by working closely with small businesses to help them finance fixed assets through the SBA 504 program.

Brent was awarded this honor by partnering with EDF on several SBA 504 loans throughout 2009 that assisted small businesses to create and retain jobs in Michigan.  “We need bankers like Brent that help the State of Michigan back to economic recovery by lending money to businesses that are expanding”, EDF President Sandy Bloem said during the presentation at the Michigan SBA Lenders Conference in Lansing on March 23, 2010.

“Despite obvious challenges in our economy, Byron Bank remains dedicated to supporting the growth of the West Michigan business community, ” said Joel Rahn, Byron Bank’s Executive Vice President, Commercial Banking. “Brent’s work with the SBA 504 program is an excellent example of this. Brent is an important part of our lending team.”

Thank you Brent for being a great advocate of the SBA 504 program and Economic Development Foundation!

SBA ReadyTalk Session

The next monthly ReadyTalk session for lenders is scheduled for Thursday, May 6 at 10:00 a.m. and will cover the following topics:

• Recovery Act update
• Lender portal presentation
• Updates on loan activity
• General Q & A

ReadyTalk is a Webinar program utilizing the Internet and a conference call system. To access the system:

From your computer:

1. Logon to www.readytalk.com

2. Login as a participant using the access code 3051501

3. Enter your name, email address, and company name as requested

From your telephone:

1. Dial 866.740.1260

2. Enter the Access Code 3051501 and press #

3. Say hello!

Recovery Act Update

New legislation was introduced and passed by the House and the Senate on March 25, 2010 (H.R. 4938) to provide additional funds to cover the fees for both 504 and 7(a)!

Up to $40 million is made available for 504 and 7(a) fee reductions and 90% 7(a) guarantees.  These new funds should enable SBA to continue providing loan authorizations for much of April.  The bill also extends the sunset on 90% 7(a) guarantees to April 30th.

There is also a bill that has been approved by the Senate and is being considered by the House (H.R. 4302) that will provide both the $5 million debenture limit and the ability to refinance existing debt through 504.  Stay tuned!

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736

TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com

Bradd Pierce
Loan Officer
bradd@growmichigan.com

Gary Witkowski
Relationship Manager
gary@growmichigan.com

Both 10 and 20-year debentures were sold this month.  The effective SBA 504 20-year March debenture rate is is 5.60%, and the effective SBA 504 10-year debenture rate is 4.59%.

Stimulus Update

On March 25, 2010, new legislation was introduced and passed by the House and the Senate (H.R. 4938) to provide additional funds to cover the fees for both 504 and 7(a)! Up to $40 million is made available for 504 and 7(a) fee reductions and 90% 7(a) guarantees.  These new funds should enable SBA to continue providing loan authorizations for much of April.  The bill also extends the sunset on 90% 7(a) guarantees to April 30th.

Please remember that the borrower must obtain an authorization under the Recovery Act to qualify for the fee waivers.  After April 30 (or when the stimulus funds are not available), we can still submit applications under the Recovery Act, but the loan application will be put into a loan queue until stimulus money becomes available.

There are currently bills in both the House and Senate that address additional funds for both the fee waivers and the higher guarantee percentage to continue through the end of 2010.  These bills also contain language to increase the maximum debenture to $5 million ($5.5 million for manufacturing projects) and to enable the 504 program to be used temporarily for re-financing of debt on eligible fixed asset projects.  We will keep you informed as these bills progress further.

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736
TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com

Bradd Pierce
Loan Officer
bradd@growmichigan.com

Gary Witkowski
Relationship Manager
gary@growmichigan.com

The effective SBA 504 20-year February debenture rate is is 5.55%.  The effective SBA 504 10-year January debenture rate is 4.91%.  Ten-year debentures are only sold every other month.

In early February the Obama Administration announced a new proposal to expand the 504 Loan program to temporarily allow straight refinancing of existing debt.  A summary of the article with a link is below.

Save the date!  The 12th Annual Michigan SBA Lender’s Conference will be held on Tuesday, March 23.  See more details below.

Refinance Update

The Obama Administration announced several proposals to help small business gain access to capital early this month.  Two of the proposals will directly affect the SBA 504 program: temporary ability to refinance existing debt and an increase to the limits on SBA 504 loan amounts.

The refinance proposal under the SBA 504 program will allow refinancing of small business owner-occupied CRE loans that are maturing in the next few years. Under this new proposal, borrowers with either existing 504 loans or conventional CRE loans could apply for refinancing through the 504 program.

Also part of this proposal includes extending the fee relief until the end of the fiscal year (September 30, 2010).

The president also re-iterated his proposal to permanently increase the limits on some of SBA’s most popular loans. The proposal includes the following increases:

The proposal would increase 504 loans from $2 million to $5 million for standard borrowers (supporting a total project of $12.5 million), and from $4 million to $5.5 million for manufacturers (supporting a total project of $13.75 million).

EDF is optimistic that all of the proposals will be approved soon.  However, at this time they are only proposals.  See the link below to read the entire article regarding all SBA proposed changes.

Proposed changes to SBA programs

12th Annual Michigan SBA Lender’s Conference

Mark your calendars now for Tuesday, March 23, 2010 at the Kellogg Center in East Lansing.

The annual Michigan SBA Lender’s Conference will feature leading experts in SBA lending.  Workshops include:  Advanced Lender Roundtable, SBAExpress, Utilizing the Secondary Market, SBA loan liquidation process and the “Ten Tabs” system, Basics of Servicing SBA Loans, and of course, updates on the SBA 504 Loan Program.

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736
TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com

Bradd Pierce
Loan Officer
bradd@growmichigan.com

Gary Witkowski
Relationship Manager
gary@growmichigan.com

Both 10-year and 20-year debentures were sold this month.  The effective SBA 504 20-year January debenture rate is is 5.79%.  The effective 10-year debenture rate is 4.91%.

New At EDF

The EDF would like to welcome Bradd Pierce to the staff as a loan officer. Bradd comes to us with over 18 years experience as a commercial lender in the Grand Rapids market. Bradd will specialize in business development and customer relationships with the many 504 referral sources throughout Kent County and beyond. He lives in the BIG town of Dorr, Michigan with his wife of 16 years Cindy, 3 sons Ryan, Dylan, Kyle and new Chocolate Lab pup- Remington. He is an avid outdoorsman and loves hunting, boating and golfing when time permits.

Bradd has joined our team, committed to valuing relationships, excellent service delivery, expert knowledge and professional conduct – all of the ingredients that have been a part of EDF since 1981.

Bradd’s contact information is shown below. Please call him with any SBA 504 questions or prospects you might have.
Cell: 616-304-8881
Office: 616-459-4825 XT 20
Fax: 616-458-5736
Email: bradd@growmichigan.com

2010 Michigan SBA Lender’s Conference

Don’t forget to mark your calendar.  SBA’s 12th Annual Michigan SBA Lenders’ Conference will be held March 23, 2010 at the Kellogg Center at Michigan State University in East Lansing.  Cosponsored by the Michigan Small Business and Technology Development Center, the conference will feature training sessions on a wide range of topics for a variety of bank personnel.

EDF Contacts

Ph.  616-459-4825
Fax 616-458-5736
TF  888-330-1776

Sandy Bloem
Executive Director
sandy@growmichigan.com
Bradd Pierce
Loan Officer
bradd@growmichigan.com
Gary Witkowski
Relationship Manager
gary@growmichigan.com

Economic Development Foundation

SBA 504 November Rates

Both 20 and 10-year debentures were sold this month.  The effective SBA 504 November 20-year rate remains near the all time  low at 5.03!  The effective 10-year debenture rate is 4.14%.

Last month the Federal Government announced a proposal to increase the SBA 504 cap.  The current cap is $2 million (public policy goals) or $4 million (manufacturer) and the proposed increase is $5 million!  This has several advantages for both lenders and borrowers which are discussed below.

The second article below is an update on the stimulus bill. SBA is anticipating the stimulus money to run out by early December.

There have been many changes to the SBA 504 program.  Many of the changes have been positive for both the banks and borrowers.  We encourage you to give us a call to discuss any eligibility questions you might have.  Also, EDF would be happy to come to your office and give a short presentation (Free!) detailing the SBA 504 program and all the changes that have taken place over the past year

Cap Increase

The Federal government has announced a proposal to increase the cap on the size of the Small Business Administration’s 504 loans from $2 million to $5 million.

Currently the maximum loan under the program is $2 million (or $4 million for manufacturers).  The percentage of 504 loans for more than $1.5 million has grown, from 15% of all dollars loaned in 2005 to 28% in 2009.  This expansion of the cap on the size of SBA 504 loans will allow small businesses to undertake larger projects.

More importantly, this proposal will be very beneficial for borrowers who have current SBA loans and are “maxed” out at the $2 million mark.  This will let the borrowers use the SBA 504 program on multiple projects (until the max at the $5 million).

Stimulus Bill Update

SBA announced that they anticipate the stimulus money for the SBA 504 program to run out early December.  If an authorization shows the fee reduction, the borrower is guaranteed the stimulus benefit.  In order to receive the fee reduction the borrowers must obtain an authorization before the stimulus money runs out.

What will stay in place is the refinance option that was introduced as part of the stimulus program.  This gives the borrower an option to include existing debt into the new SBA 504 project.

EDF Contacts

Sandy Bloem
Executive Director

sandy@growmichigan.com

Gary Witkowski

Relationship Manager

gary@growmichigan.com

Ph.  616-459-4825
Fax 616-458-5736
TF   888-330-1776