First, locate the nearest CDC in our Member Directory and give them a call to talk with a loan officer and discuss your project. Meet with the CDC loan officer to structure your financing, then submit your application to the CDC. The application consists of basically the same materials you will submit to your bank. Basic application materials include:
Three years of financial statements and federal tax returns on the company (if in existence for 3 years); if there is no historical cash flow ability to service the proposed new debt, provide 2-3 years financial projections; personal financial statement (assets and liabilities) on the owners of the company; written history of the business, reasons for expansion, plans; copy of sales agreement; personal history statement of principals indicating citizenship status, etc.
Next, contact your bank to see if they would like to participate by providing the permanent first mortgage and bridge loan. It is highly likely they will have a bank officer who works specifically with SBA loan programs and will be able to assist you.
The CDC's staff will review and evaluate you and your small business. The CDC will draw credit reports, do supplier, bank and trade checks, visit your existing and proposed operations/facilities; assess your credit ability and character. Once your bank or other 50% first mortgage lender has indicated an interest in financing the first mortgage, the CDC staff prepares a loan memorandum and presents it to the CDC's Loan Review Board which meets at least once per month (more often if necessary).
Once the board approves the project, the CDC submits your application to the SBA to obtain its agreement to guarantee the CDC's bond. This generally takes a few days. The CDC then issues a commitment and your bank closes its first mortgage loan and bridge loan. You then take the bank's funds to complete the project. When the project is complete, you close with the CDC and the CDC wires the money to the bridge lender. You then pay the CDC back for the SBA 504 loan. The CDC services the loan for for the entire term of the loan.