Frequently Asked Questions

504 Loan | SBA 7(a) Loan Packaging | Wellmark Mezzanine Fund

504 Loan

Q Does the loan process take a lot of time?
A No, it generally takes 2-3 weeks from the time we get the completed application

Q Is the 504 loan assumable?
A Yes, provided company qualifies from credit standpoint

Q Is the application extensive?
A The 504 application requires little more than is required by the normal lender

Q Is there a prepayment penalty?
A Yes, but only for the first half of the loan

Q Aren’t significant restrictions with all SBA loans?
A Not necessarily. The 504 loan has few management restrictions

Q Aren’t SBA loans just for start-up or high-risk businesses?
A Some are, but the 504 is targeted to existing businesses who need to expand

Q Can a start-up business qualify?
A Yes, however, the down payment requirement increases to at least 15%

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SBA  7(a) Loan Packaging

Q Does IBG offer credit advice?
A Yes, but the credit decision must be made solely by the lender

Q Why wouldn’t a lender do the application without IBG?
A IBG has the specific software required to prepare the application documents
and bank analysis forms that are required by the SBA. IBG staff, furthermore
helps save the lender the time and effort of becoming familiar with the terms and conditions of the program

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Wellmark Mezzanine Fund

Q Is this very expensive?
A The terms are more costly than conventional loans, but less than
typical mezzanine financing

Q Will I be giving up ownership in my business?
A No. The loan does not require stock ownership or stock conversion privileges

Q What if my company doesn’t have extra available collateral?
A The loan requires a junior lien of available assets only

Q Can my company pay off the loan early?
A Yes, in fact it is encouraged with increasing “success” fees payable to Wellmark as the loan approaches maturity

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