What Happens After Your SBA 504 Loan Closes

Who you'll be dealing with

Two people, with names. Karen Szachara manages the portfolio behind them. The loan officer who closed your loan is still in the building too.

How payments work

The SBA payment starts the month after the debenture funds. Between closing and funding, you pay the bank's interim loan. The central servicing agent processes the debenture pool's payments; NSDC is who you call.

What you'll provide each year

• Annual financial statements or tax returns
• Proof of insurance on the property
• Confirmation that your business still occupies the building

That's the list. It's light, and saying so removes a real fear.

Paying it off early

You can, with a premium on the SBA portion that declines each year and reaches zero at year 11 on a 20- or 25-year loan. Call servicing for the exact figure; it's a formula, not a flat percentage. The prepayment rules.

When something changes

A tenant leaves. You want to sell, or expand into the space you'd been leasing out, or bring in a partner. The business has a hard year. Every one of those has a path, and every one goes better if you call before it happens rather than after. Selling with an assumption, restructuring a payment, documenting an ownership change: servicing has done all of it, and the SBA's rules allow more than most borrowers assume.

If you fall behind

Call. The earlier the better. A missed payment isn't a default; it's a conversation, and there are options, deferments and workouts among them, that exist precisely for a bad quarter. What makes things worse is silence. We publish this because a lender willing to say it is a lender you can call.

Questions

This page is for general informational purposes only and does not constitute legal, tax, or financial advice.