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No small opportunity Featured

9:36am EDT July 22, 2002

Need to expand?

Is it time to build or buy your own building?

Need a low down payment?

Is a fixed interest rate important to you?

Looking for a 20-year term on repayment?

Join Anthony Thomas Candy Co., the Columbus Athenaeum and hundreds of other small businesses in the Central Ohio area which financed their buildings through the U.S. Small Business Administration's 504 loan program. This program is designed for healthy, growing small businesses and offers:

  • A 10 percent down payment. You keep cash in your business.

  • A long term repayment schedule of 20 years. You make lower payments.

  • Fixed rates. You get predictable, stable payments.

The process begins when the business contacts a certified development company, like Columbus Countywide in Columbus, to review its project. The U.S. Small Business Administration has certified these nonprofit organizations, which assist businesses in compiling the necessary financial and business records.

Their job is to make the process as fast and easy as possible. Donato's Pizza and Functional Furnishings both worked with their local SBA 504 lender, Columbus Countywide, to get their loans.

The SBA 504 loan program usually requires a 10 percent down payment by the business. Columbus Countywide finances 40 percent and a bank finances the balance. Gibby's Grandview and Hugs N Hearts Learning Center immediately saw the benefit of this low down payment requirement, compared to the average 20 to 40 percent required by most banks.

The SBA 504 loan program can also finance professional fees incurred with new building construction, all closing costs and up to $2,500 in legal fees. This lets small businesses have ready cash available for working capital needs.

Business can also benefit from a fixed, competitive interest rate with the SBA 504 loan. In fact, the SBA 504 rate has been dropping in recent months and was recently at 9.05 percent. Jolly Pirate Donuts found that with interest rate volatility, having a fixed, predictable rate for the life of the loan was a smart business move. It can help businesses keep cash available for future growth and expansion and cushion against inflation.

Katzinger's Deli and Linden Medical Center have taken advantage of the program's long 20-year loan term. This keeps a business's monthly debt payments low and cash available for working capital needs. Banks usually ask for a 15-year term on real estate. A 504 loan makes your cash flow look better.

SBA 504 loans generally are approved and turned around within 30 days, and in some cases, in less than a week. Many business owners are not aware of this quick processing and perceive any government financing program as long and tedious. Another lesser known fact is that you can use the SBA 504 more than once and can combine financing from this program with other city, state and federal loans. BobCat of Columbus, National Sign Systems Inc. and Impulse Wear took advantage of SBA 504 financing for their real estate needs and the Ohio 166 loan program for their equipment.

The SBA 504 program also finances equipment with a useful life of 10 years or more. Ron's Express Car Wash found this an added benefit to the program.

Nfocus and Otie's Towne Pub were ready to move from renting to owning their own buildings and found the rate, down payment and long term they needed through Columbus Countywide.

In addition to the SBA 504 program, certified development companies like Columbus Countywide offer loans specifically for small equipment, working capital, inventory and refinancing some debt. These programs range in amounts from $500 to $250,000. Some specialize in start-up or high-risk businesses; others are for rural or women-, minority- or veteran-owned companies and exporters. Businesses including X Design, Terra Cotta and HTG Sales have financed their growth with these funds.

Since 1981, Columbus Countywide has helped more than 1,100 small businesses obtain financing in 13 central Ohio counties. SARCOM, Three C Body Shop and Universal Fitness and Leisure are good examples.

Columbus Countywide has approved more than $190 million in loans creating more than 11,000 jobs. Brad Shimp is executive director of Columbus Countywide Development Corp.

How to reach: Columbus Countywide Development Corp., www.ccdcorp.org, 645-6171, (888) 756-2232