Renovation Financing Package
The owners of Magnolia Point Golf & Country Club have been working closely with Duval Fields CPA Group to facilitate the Renovation Financing Package.
The following information was provided by Duval Fields:
“We have been working with Trevor & Deneen to obtain a mortgage loan for Magnolia Point Investment, LLC (MPI), their ownership entity. The financing would pay off the current first mortgage and allow funds for the renovation of the swimming pool and pub. The loan is an SBA 504 loan which is funded through a local lender, a CDC, and is partially guaranteed by SBA.
“How does a 504 loan work?”
Every SBA 504 loan is a partnership between a Certified Development Company (CDC), the Small Business Administration (SBA), and a lender. CDC’s are economic development organizations that have been certified by the SBA to make loans under the Certified Development Company Economic Development Loan Program (otherwise known as the SBA 504 Loan Program).
The CDC works with the small business borrower to process, approve, close, and service the SBA 504 loan. Funding is provided by the CDC through the issuance of 10-year or 20-year debenture bond that is sold to investors on Wall Street in a monthly offering. This gives entrepreneurs access to capital at low, fixed interest rates – usually only available to large corporations. Debenture bonds are also attractive to investors since they are backed by the SBA and fully guaranteed by the U.S. Treasury.
Working with a lender, the CDC provides up to 40% of the financing for a commercial real estate purchase or new construction with an SBA 504 loan. A lender must partner with the CDC and typically provides up to 50% of the financing, while the entrepreneur’s contribution can be as low as 10%.”
The process for obtaining this financing is very lengthy and the paperwork voluminous. At this point, MPI has already invested fees for an appraisal, environmental audit, etc. The loan has made it through the first two approvals and the package is being submitted to SBA on Monday 5/2/16 for the final approval by SBA. Their approval process could take approximately 1-10 business days.
We have worked closely with the CDC representatives to ensure that the package is in good order and we hope to facilitate a sooner approval, though as is the case with any governmental entity, they are on their own time schedule.”
The information above was provided by Duval Fields.
We hope by sharing this information, it will help everyone understand the process. The greens renovation is part of the process, but not part of the loan package.
Be sure to check our Blog page for any new information.
We appreciate your patience as we work to finalize the complete package.
Deneen and Trevor