Loan Programs

CTCIC/SBA 504 Financing Structure

CTCIC/SBA 504 Financing Structure

With the CTCIC 504 Program, CTCIC partners with your bank, or another lender, to provide a financing package for up to 90% of your Project. Following is an example of a typical CTCIC 504 loan package compared to Conventional financing (note that both hard and soft costs are included in this example).

 

(1) Project Costs are defined

Purchase of land & building $1,000,000
Construction/renovation & 10% Contingency costs $ 590,000
Soft Costs (includes environmental; architect; legal fees for zoning & permits, etc.) $ 10,000
Total Project Cost $1,600,000

 

(2) Project Costs eligible for Financing are determined

  CTCIC 504 Project Financing Conventional Project Financing
Land & Building $1,000,000 $1,000,000
Construction/Renovation & Contingency $ 590,000 $590,000
Soft Costs* $ 10,000 Not Financeable
Total Financing $1,600,000 $1,590,000

  * Soft Costs are not financeable with conventional financing

(3) Financing is allocated

Third Party Lender – 1st mortgage 50% – $800,000 80% – $1,272,000
CTCIC/SBA – 2nd mortgage 40% – $640,000 N/A
Borrower Equity Injection 10% – $160,000 20% – $318,000
Soft Costs (paid by the Borrower) Included in project $10,000
Total Project Cost $1,600,000 $1,600,000
Total Borrower Out of Pocket Costs† $160,000 $328,000

†Not including closing costs

 

With the CTCIC/SBA 504 Program you save $168,000 of Working Capital not tied to the Project!