Growth Corp’s Closing Team works diligently to ensure approved projects are funded in a timely manner. As soon as a 504 loan has been approved, a Closing Specialist is assigned to the project and will thoroughly prepare all the paperwork necessary for closing. Keep in mind…borrowers continue to work with their bank throughout the process, and the banker will assist their borrower in gathering the following documents necessary for closing:
•
Appraisal
•
Environmental
• Title Work
• The Bank’s Note and Mortgage
• Organizational Docs
• Life Insurance Policies…these can be time consuming, so please plan ahead
Additional documents will also be needed to complete the closing book, but can be collected while awaiting closing or at closing.
The timing of funding will then depend on where we are in the current cycle, as we are always working 30-60 days out. Here’s why…once our legal department gets all the closing documents prepared, our attorneys will schedule a closing. Post-closing, the complete file is then turned over to the SBA and the loan is pooled with all the other 504 loans funded in the same month. The pool of loans is sold to investors in the form of
debentures… typically on the first Tuesday of every month.
The borrower’s interest rate will be determined from the sale of those
debentures and is based on current market conditions. See the chart below for a one-year rate history. Generally the rates have been between 60 to 100 basis points above the 5 and 10 year Treasury bonds. A borrower's monthly payment will include principal, interest and a loan servicing/
guaranty fee.
Once the rate is established, the borrower will receive their amortization schedule and begin making payments to
Colson Services Corporation. This corporation handles the payment processing and loan accounting for all SBA 504 loans. Keep in mind…all questions regarding the loan should still be directed to Growth Corp.
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