I'm hearing 504 lenders pulling back right now, or is that just rumor? Thnx

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May 11, 2020

by a searcher from The University of Auckland - The University of Auckland Business School in Los Angeles, CA, USA

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Reply by a lender
from University of Missouri in St. Louis, MO, USA
CDCs are the SBA in 504 loans. They would be impacted by the SBA running out of money during the most recent PPP allocation (similar to 7A loans). The benefit of a 504 is that you can fund those still and have the CDC/SBA take you out later. 7A loans require the SBA authorization upfront. So there really shouldn’t be any issues on a 504 loan unless a bank feels the SBA funds won’t be there down the road. I would guess the “504 lender” is this scenario is a bank that is having difficulty funding any loan due to capital allocations from their PPP loans.
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Reply by a lender
from Rutgers, The State University of New Jersey in Syracuse, NY, USA
I would guess that appraisals are the concern as the primary basis for the 504 program is Loan To Value. Assuming the properties don't appraise at the right values can create difficult situations for all parties involved.
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