Louisiana Capital

Lender Information

The 504 Loan Program is utilized to finance existing, expanding and start-up businesses in conjunction with another lender (usually a bank). Louisiana Capital provides permanent take-out financing when the project is completed and the loan is closed in accordance with Louisiana Capital loan covenants and restrictions.

Louisiana Capital works with the small business owner and lender to process, approve, close and service the 504 loan. Funding is arranged by Louisiana Capital issuing a 10 or 20 year bond that is sold to investors on Wall Street. These bonds are attractive to investors since they are fully guaranteed by the U.S. Treasury in the event a small business should default.

Private Lender Participation

Minimum 10 year term on real estate; 7 year term on machinery and equipment.

Typical Loan Structure

HOW A TYPICAL 504
DEBENTURE LOAN IS STRUCTURED

Purchase of Land And Building

Bank Financing	50%	$1,000,000
CDC Debenture	40%	$800,000
Company Cash Down	10%	$200,000

TOTAL ............

100%

$2,000,000

Businesses can obtain up to 90% financing. However, a larger down payment will be required with start-up businesses and projects with single purpose buildings.

Lender Advantages

For the banker wishing to participate as the 50% first mortgage lender, you get CRA credits; you lend at a lower loan to value ratio; you keep a growing customer happy; you have lower risk because the SBA 504 loan is in second position behind you. The community gets the advantage of keeping or attracting a healthy, growing small business that will be creating jobs and doing other wonderful things in the community.

Rates / Fees

Based on reasonable terms in alignment with market rates and fees. One time 1/2% fee on private lender's term loan portion.