The Small Business Administration’s most popular “loan product” is the 7(a). Like the SBA 504, the 7(a) may be used for real estate transactions, but offers a variety of other options:
• To acquire equipment, machinery, furniture, fixtures,supplies, or materials. For long-term working capital, including the payment of accounts payable and/or for the purchase of inventory.
• To refinance existing business indebtedness which is not already structured with reasonable terms and conditions.
• For short-term working capital needs, including Seasonal financing, contract performance, construction financing, export production, and for financing against existing inventory and receivables under special conditions; or
• To purchase an existing business.
Both programs offer great solutions for smal business owners. The recovery of or economy will also depend on the success of small businesses in USA.
Denise Beeson
The 2009 American Recovery and Reinvestment Act has opened a wider door to the real estate market by increasing access to and lowering the cost of Small Business Administration financing to business owners. The act also temporarily waives borrower fees on SBA 504 Certified Development Company (CDC) loans, encouraging real estate buying now.
This will mean more capital available to small businesses at a lower cost
The SBA 504 program is a long term financing tool for economic development within a community, and provides growing businesses with long-term financing for purchases or refinancing of land and buildings.
A typical SBA 504 project includes a loan secured with:
1. A minimum down payment of 10 percent equity from the small business being aided— much lower than the usual 25 percent to 50 percent for standard commercial loans.
2. A maximum 50 percent senior loan (1st trust deed) from an SBA-approved lender.
3. A loan secured with a junior lien (2nd trust deed) from the SBA-certified CDC lender covering up to 40 percent of the cost or the maximum allowed, whichever is less.
In addition to lowering the cost of the SBA 504 application process, the 2009 American Recovery and Reinvestment Act also empowers SBA to establish a Secondary Market Lending Authority for pools of CDC-guaranteed “first lien” loans under the SBA 504 program. “First lien” loans from commercial lenders normally have no such guarantee. Nor are they usually assumable. Providing liquidity for these first mortgages will help encourage lenders to continue participatingin SBA’s 504 loan program, which provides a key source of capital for community development and other projects.
Some borrower qualifications
1. The owner’s business must occupy 51 percent of the building’s total area. 2. The business must be “for profit.” 3. Title can be held individually, in a family trust, or corporately. Most small business owners create a separate corporation or company, defined by SBA as an “EPC” or Eligible Passive Company. 4. The business must meet certain size requirements set by SBA guidelines.
Denise Beeson
This program was developed to help address first-time home buyers’ concerns about potential job loss and how such a loss would impact their ability to make their mortgage payment. Through the Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.
The first time home buyers tax credit ends in a few month, together withe the mortgage protection program this is a time to get serious about buying a home.
And the definition of a first time home buyer: someone who has not lived in his owner occupied home for 3 years. So technically, someone who owns rental property and has been renting the last 3 years is a first time home buyer.
The government pays you to buy a house, go for it!
Mirjam
Some buyers are trying to time the bottom of the market and purchase once it appears that prices are consistently and steadily rising. Many housing forecasters advise against this approach as buyers should not view their homes solely as investment opportunities. Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data C.A.R. has collected over the last 40 years.
Despite what you make think: today is a great day to buy your next home in Sonoma County.
Have a great weekend,
Mirjam
Mirjam on July 3rd 2009 in Buyers, Sonoma County info
Mark Quinn provided a very informative presentation at the April 1 meeting of the Sonoma County Alliance held at the Santa Rosa Golf and Country Club. The Sonoma County Alliance is a county-wide coalition of business, agriculture, labor and individuals incorporated to encourage a healthy economy, maintain a sound environment, protect private property rights and promote a responsive political process. Their monthly forums seek to maintain a visible force in community affairs; engage elected officials in dialogue regarding the establishment of public policy; provide a forum for its membership concerning land use and development, housing, taxation and allied matters; and increase membership interest and participation in legislative and political affairs on a countywide basis.
Mr. Quinn discussed the recent changes to the SBA 7a and 504 programs in addition to discussing a new program entitled the “American Recovery Program” that will be available in the next 6 weeks. These programs are the backbone of loans for working capital as well as real estate and business acquisition for small businesses.
According to the SBA website www.sba.gov, “The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.” The Obama Administration has specifically set aside funds to stimulate the small business economy since it is recognized that small business is critical to our economic recovery and strength during this recession. Large companies are shedding jobs and it is small businesses that hopefully will add jobs under the government stimulus plans.
Some if the program changes that Mr. Quinn discussed where 1) increase funds of $50M distributed to non-profits for the SBA Micro loan program 2) SBA 7a fees waived which are normally passed on to the small business from banks and the increase from 75%-90% guarantee to banks, and 3) the potential of the Dept of Treasury to buy 7a loans on the secondary market where some banks pick up added revenue. He also introduced the American Recovery Program which will be a new SBA program that will provide “short” term loans specifically for business that may be facing short-term cash flow problems during the recession. Loans will be up to $35,000 and the SBA will pay the first year interest and payment due for the first year. Further details forthcoming in the next few weeks for this program.
Mr. Quinn acknowledged that more resources are needed for the department to assist in processing loans and streamlining the process however it is up to Congress to fund SBA’s activities. He was hopeful that some additional funds will be increased for operations under the stimulus plan since the SBA heavily depends on it SBA “preferred” banks to really carry the burden of local underwriting, processing and outreach.
Denise Beeson works with Small Business Owners and Real Estate professionals specializing in placing commercial loans including SBA with preferred lending institutions and private money financing.
Windsor schools have unveiled their new website : www.wusd.org.
Great website, easy to navigate, allows you link to the different schools in Windsor, to pay fees online and coming soon will also allow parent access to individual student records.
Windsor is a great place to live, did you visit the town green lately and sipped your latte at Caffe Noto or Starbucks?
Should you need the perfect hair cut, please visit Bella Nova Salon be, a great place to experience. They are always looking for better products with less toxins/healthier ways to treat your hair. They also offer online booking, tell them I send you and you will receive a 10% discount on your first treatment.
Last week barrel tasting… our visit to Windsor Oaks Winery was perfect as was the last time, great wines, great location and they just started a wine club. Ask Regina for more info: Regina@windsoroaks.com.
And by the way… should you decide Windsor is the place for you to live… there are a few houses right now on the market on just the perfect locations. Should you like to stay on top of these great deals, just let me know and I will put you on my special update list.
Mirjam (mirjam@c21alliance.com)
Earlier this week I had the privilege to be at a financial seminar organized by Wachovia Securities. Senior Portfolio Manager Margaret Patel was the first speaker and besides a lot of valuable information she expects the real estate market to go further down, about 10-15%. Of course this forecast is based on the financial and economic situation in general and is an overview of the real estate market nation wide. However, all real estate is local and the following charts show what’s currently happening in the real estate market in Sonoma County. Please feel free to give your opinion, quite frankly I think with numbers like these we might have hit bottom in Sonoma County…
In the mean time, don’t forget that we live in beautiful Sonoma County and this weekend and the next weekend is Wine Road Barrel Tasting.
Should you like to go next week, it’s cheaper to order tickets ahead of time, click here to order.
Have a great day!
Mirjam -707-486-2638
Golden Capital Network
Golden Capital Network fuels innovation, entrepreneurship and investment capital networks by
- Assisting and coaching companies to become more “investment ready”
- Connecting companies to accredited angel and venture capital investors
- Sourcing company deal flow to investors
- Fostering entrepreneurial networks in forward-thinking communities for economic development
- Providing early stage capital for companies
Venture Communities ignites entrepreneurship and investing by connecting innovative companies, early stage investors and forward thinking communities.
Venture Communities is part of the Golden Capital Network, where over 1000 companies have raised over $1.3 billion in capital from accredited angels and venture capital firms since 1999.
Venture Communities Online is a virtual community where companies, investors, talent , media and other high-value participants create individual and company profiles to share knowledge, make connections, distribute milestone news and get involved in innovation-focused events in their region and throughout the network.
Venture Communities provides:
- Networking and connections for companies, investors, advisors and communities across regions, industries and disciplines
- Access to exclusive content and coaching for growth entrepreneurs, angel investors, policy-makers
- Event updates and special VIP registration offers for all events and activities happening in the Venture Communities network
Members of the network engage in different ways to get the most from Venture Communitie:
Growth Companies
With a secure company profile, you can:
- Send news about your company throughout the entire GCN subscriber network
- Invite investors and advisors to view your profile and inquire about their interest in your company
- Upload a two-minute video elevator pitch and other documents as part of your profile
- Apply to present at a VIP registration rate at future GCN events
- Apply to the Golden Capital Venture Fund
- Keep tabs on upcoming events, networking opportunities and other entrepreneur-investor focused activities in your region and throughout the entire Venture Communities network.
Investors
With an individual, fund or angel investor group profile you can:
- Keep periodic tabs on companies you see at GCN live or virtual events you think might be interesting, but who aren’t a fit right now
- Send news about your fund, investing group or portfolio companies through the GCN subscriber network
Advisors and Service Providers
- Create an advisor profile to connect with your advisory group and add value to your most promising companies.
Individuals
- Create a Community Member profile to receive newsfeeds, manage your watchlist, keep tabs on innovation entrepreneurship by industry, region or events
Denise on September 15th 2008 in Economy, RE Investing, Sonoma County info
Isn’t it great, all the tools we have to totally check out a property before setting foot in it? Of course when a property is for sale there is the property website : www.3605Sumatra.com is an example, the virtual tours: here’s on of my newest versions and the Google satellite views.
And now there is Google Street View… And MSN has bird eye view. Here is my office, it’s on the corner… Did you get a chance to travel through your neighborhood?
The Pressdemocrat had an article about the privacy issues involved. The people who are concerned to make a point, in the meantime: it’s a great tool to ’scope out’ a property and a neighborhood before even visiting the property.
There is ofcourse lot’s more to learn about a property when you decide to sell or buy, but technology today gives a great start.
Have a great exploring day!
Mirjam
Mirjam on July 29th 2008 in Sellers, Buyers, Sonoma County info
The Press Democrat had a article about the “Bittersweet windfall”: when you bought you home at the height of the market, you can ask for an adjustment for your property taxes. Your Realtor can help you with the ‘comps’ by the way, just call and ask. he/she will know what you need.
However, coming back on the article: Now is a great time to buy property, most people know that by know. However, ever thought of the fact that it’s also a great time to move up/move down? Yes you will sell your home for less than if you would have sold it in 2005 however, what you are moving into is also less and guess what the basis is for your property taxes… yep, current market value, in most cases the price you paid for the home. And for investors: quite a few properties do cash flow…
Actually my friend Raquel stated it very smart: it doesn’t matter when you buy or sell as long as you do it in the same market. It’s very difficult to time a market, investors do in some way, but so far the people that were waiting for the market to come down/go up have done nothing at all. So Raquel is right: ‘do the math’ see whether it makes sense and make your dreams come true!
And some stats to prove that sales are picking up:
Have a great weekend. Great recommendation from Pat Pisenti (best Chiropractor in town) for a small winery with great wines: Porter Creek Vineyards. I haven’t been there recently so let me know what you think.
Have a great day!
Mirjam de Rijk - email: mirjam@c21alliance.com