Money is available for buyers despite the credit crisis

Despite the credit crisis, there is money available for businesses and not-for-profits to purchase buildings, condos and coops for their operations. The SBA 504 and New Market Loan Programs work to supplement bank financing to provide 90% (of total project cost) long term, fixed rate funding for customers. These programs are well funded and still lending to businesses and nonprofits. While many banks have tightened credit criteria for commercial expansions, they are still ready, willing and able to provide financing together with SBA 504 or New Markets because these programs mitigate the bank's risk by lending in a subordinate mortgage position to the bank's loan. SBA 504 is funded by the issuance of bonds, pooled and sold to major institutional investors because of the 100% SBA guarantee of the pool. More and more investors are flocking to buy pieces of this pool because of the full faith and credit backing of the US government. In addition to the expanding investor base, these bonds enjoy a 27-year record of regular calendars and clear pricing rationales with rates remaining in a fairly stable range throughout the economic crisis. The New Market Loan Program, operated under the auspices of the nationally renowned Community Reinvestment Fund, also enjoys major liquidity thanks, in part, to the recent announcement of a $110 million allocation from New Market Tax Credits. The SBA 504 and New Market Programs together with bank financing provide affordable financing for buyers looking to take advantage of historically low real estate prices by locking into ownership of their own facilities. This type of financing lowers the down payment for the buyer, leaves intact the buyer's working capital, induces banks to fund part of the project because of reduced risk, and helps buyers stabilize costs and location while building equity for their business or entity and families. So, as a real estate broker, if you have a client on the fence because of concerns about financing, or a banker in the transaction who is hesitant, tell them to seek out the SBA 504 or New Market Programs to complete the financing package. The bottom line is that money is still available for your commercial buyers- business or nonprofit. Help them access it! Roslyn Goldmacher is a licensed real estate broker in N.Y. as well as president/CEO and founder of the Long Island Development Corp. & The Greater N.Y. Development Co.