A Recent SBA 504 Refinance Transaction from CDC New England for a Contractor

A Recent SBA 504 Transaction from BDC’s 504 affiliate CDC New England

Challenge:  A contractor specializing in renovation and restoration of residential and commercial properties needed its debt restructured.  The company was established over 30 years ago by the current owner.  Although revenues were impacted by the downturn in the economy in 2009 and 2010, revenues had rebounded in 2011 and were strong year-to-date 2012 with continued profitability.  The company had fully advanced on both its business and equipment lines of credit.  Mortgage debt that originated from the acquisition of the company’s headquarters 10 years earlier was $500,000.  This real estate recently appraised at $950,000.  The existing banker contacted CDC New England to solve its borrower’s financing needs.

Solution:  An SBA 504 refinance loan was quickly approved through CDC New England to refinance the $500,000 mortgage debt plus two existing lines of credit totaling $350,000 for a combined 90% loan to value. The two lines of credit were closed once they were paid off, with a third overdraft line of credit kept active. The existing bank’s exposure remained at a low, 53% first position on the real estate.  The refinance of the debt enabled the borrower to reduce its debt service requirements by 17% per year while being able to lock in long term, 20-year fixed rate financing with low rates.  It was a “win -win” for both the bank and the borrower.

CDC New England:

    *    Fastest Loan Approvals

    *    Creative Problem Solving

    *    Constant Communication