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Building
Acquisition or Construction
NYBDC Group
provides permanent financing only. We do not provide lines of
credit or construction loans. We work with our partner banks
to provide the financing for your real estate needs. If you
have a need for construction financing, we can assist you with
the permanent “take out” financing approval which provides
comfort to the bank who is providing the construction
financing.
 As a fixed asset
lender, we have a variety of different loan structures
depending on how much money you have to put down as a down
payment on the purchase. We can fix the interest rate for up
to 20 years with repayment terms as long as 20 years. NYBDC’s
loan limits range from $50,000 to $1,500,000. We are a
complement to bank financing and do not compete with our
partner banks. Many loan structures include NYBDC, a
partner bank and
other subordinate lenders which can bring the total financing
to exceed $5 million. Our most popular loan program for real
estate is the 504 Loan Program.
504 Loan Program
 The SBA 504 Loan Program is administered through our affiliated
company, Empire State Certified Development Corporation (ESCDC).
The program is a fixed asset economic development program
designed to promote growth and job creation in small and
medium-size businesses. ESCDC is a national leader in loan
approvals for this program. This program should be used by
businesses with good track records and promising growth
opportunities. ESCDC, in partnership with your bank, can
provide fixed rate, low down payment financing for building
acquisitions, construction and equipment purchases.
504
Loan Program Highlights
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Preservation of valuable working capital
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Fully
amortized loans; no balloon payments
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Up to
90% financing for fixed assets
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Attractive fixed-interest rates
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Extended
repayment terms
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Lowers
risk for banks
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No mortgage recording tax for acquired property
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Soft costs/closing costs may be
included in the project financing
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Loan
Amounts
$1.5 million for
standard loans
$2 million for
public policy loans*
$4 million for
manufacturing loans
*The
public policy loan limits relate to businesses that
include, but are not limited to, minority-owned,
women-owned, veteran-owned, or located in rural or
economic development areas.
Use
of Funds
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Land
acquisition and improvements
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Building
acquisition and/or construction
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Machinery
and equipment
(Please note: Not
available for
refinancing debt)
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Eligibility
Net
worth of less than $7,500,000 and net profit of less
than $2,500,000.
Real Estate
Occupancy
For existing buildings, at least 51% must be owner-occupied. No loan proceeds can be used to make specific improvements to the
non-owner occupied space. For new construction, only
40% or less may be leased to an
unrelated tenant and at least 60% must be owner-occupied.
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Interest
Rates
The
ESCDC second mortgage interest rate is fixed at the
time of funding at a rate tied to Treasury securities.
The
10-year Treasury rate is the basis for real estate
projects and the 5-year
Treasury rate is the basis for equipment projects.
See current rates
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Job
Creation or Retention
Borrower
must create or retain one (1) job per $50,000 of ESCDC
money lent within two years and one job per $100,000
for manufacturing projects. (Exceptions to job
requirements exist).
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Loan
Structure
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Bank
and/or NYBDC |
50 |
% |
( 1st
Mtg. or Lien) |
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ESCDC/SBA
504 |
40 |
% |
( 2nd Mtg. or Lien) |
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Owner’s
Equity |
10 |
% |
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100 |
% |
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Repayment
Terms
ESCDC
Advantages
ESCDC’s
portion of the mortgage recording tax is waived when no construction or
renovation occurs. Soft
costs/closing costs may be included in the project financing.
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Owner’s
Equity
Requirement
Typically,
only 10% equity is required in the form of cash and/or equity in the
existing land/building to be improved.
The equity requirement increases to 15% for start-ups (less than two
years old) or special-purpose real estate.
If both start-up and special-purpose situations exist, 20% equity is
required.
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Contact us to discuss your
building project. |
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