We are delighted you have chosen to work with Business Finance Group. Once your loan funds, we recognize this is just the beginning of an ongoing long-term relationship.  We are dedicated to providing you the very best in customer service and we are here to help you with all of your servicing needs. Please contact us at info@businessfinancegroup.org if you have any questions.

Closing FAQ’s

What are the requirements to fund my SBA loan?

The SBA Loan Authorization outlines the requirements for funding your loan. All documents requested by the CDC must be received and reviewed by the CDC’s closing attorney and once it has been determined that all the SBA requirements are met, BFG will be in a position to submit your loan for funding.

Why do I need to provide a business license and what if my city does not issue business licenses?

SBA requires evidence that your business is legally able to operate in the location purchased through the 504 loan program. This may be a license from either the city or county, as applicable to your area and type of business.

What are the SBA requirements for insurance?

Borrower must obtain adequate insurance coverage and maintain this coverage for the life of the Loan. Refer to section E.1 Insurance Requirements in your SBA Loan Authorization.

Common insurance requirements:

Real Estate Hazard Insurance coverage on all real estate that is collateral for the loan in the amount of the full replacement cost/insurable value referenced in the appraisal. If full replacement cost insurance is not available, coverage must be for maximum insurable value.

Personal Property Hazard Insurance coverage on all equipment, fixtures or inventory that is collateral for the Loan in the amount of the full replacement cost/insurable value referenced in the appraisal. If full replacement cost insurance is not available, coverage must be for maximum insurable value.

Flood Insurance is required if any portion of a building that is collateral for the loan is located in a special flood hazard area. If any equipment, fixtures, or inventory that is collateral for the loan (“personal property collateral”) is in a building any portion of which is located in a special flood hazard area borrower must obtain available flood insurance for the personal property collateral. Insurance coverage must be in amounts equal to the lesser of the insurable value of the property or the maximum limit of coverage available.

Life Insurance SBA may require life insurance on Key persons involved with ensuring the success of the company.  Any amount of life insurance will be determined during the application process.

When/where will I sign my SBA loan documents?

The SBA 504 Program will likely involve two settlements.  SBA documents are signed once the project being financed is complete. Once loan documents have been prepared they are typically sent to Title Company for your signature. The Title Agent will contact you to schedule closing.

Why do my loan documents not have an interest rate or payment information on the Note?

Because of the timing of the bond sale, your interest rate is not determined until the week of funding. Once that information is available, your Closing Officer will send you your rate and payment information.

What do the SBA loan fees consist of? Can I pay them upfront or do they have to be financed?

The 504 loan fees consist of the guarantee fee, funding fee, processing or packaging fee, closing costs, and the underwriter’s fee. To see a breakdown for your loan, refer to section B. Project Financing in the SBA Loan Authorization. These fees are also outlined in your BFG Assistance Agreement. The only fees that can be paid upfront are the processing fee and the Closing costs

What are my options for the payment plans?

Payments are due on the first business day of the month by automatic debit from your preferred bank account. Your first auto-debit will occur on the first business day of the month after your loan funds from the account you provided at closing. SBA requires payment be set up as auto-debit. There are no exceptions.

Construction projects: If I am financing improvements with loan proceeds, what are the requirements? What is the construction process and how does it work?

We will need your active assistance to complete the process once your project is near to completion.

  • We will work with you and your bank partner to monitor the construction phase and to finalize the 504 closing process once your project is complete.
  • Your conditions outlined in the SBA 504 Loan Authorization must be met.
  • Your construction lender must provide confirmation to BFG that construction is complete and all funds have been disbursed, so that we can verify the final project costs.
  • Notice of Completion must be filed. Timeliness of this filing is important because BFG must allow all mechanics liens to be cleared for your contractors or subcontractors.
  • You must provide BFG with updated financial information in order to verify that your financial condition has not changed substantially since the time that you applied for your SBA loan.

Construction projects: Who is monitoring the progress of my construction?

Your construction lender will be monitoring the progress of your project. BFG will also be tracking the status of construction, estimated completion date, and the status on fund disbursement to the contractors in cooperation with your construction lender.

Servicing FAQ’s

Can I obtain another SBA 504 Loan?

Yes, you may be eligible for another SBA 504 loan. BFG has numerous clients who have received two or more SBA 504 loans to finance new locations and expansions for their growing businesses. Please contact us www.info@businessfinancegroup.org to find out if you are eligible for additional SBA 504 loan financing.

When is my loan payment due?

Loan payments are due every month on the first business day. The account cannot be debited on any other day of the month. Late fees will be applied if the loan payment is received after the 15th of the month.

How are my loan payments made?

Loan payments are processed by automatic debit/ACH (Automatic Clearing House). In the closing process with BFG, you filled out an authorization form and provided a voided check indicating the account from which your loan payments will be automatically debited.

Can I change the account my loan payments are debited from?

Yes.  A new ACH debit authorization form and a voided check are needed.  Please email swilley@businessfinancegroup.org  to receive a new ACH form. We must receive the new form and voided check by the 10th of the month in order for the new account to take effect the following month.

What is Wells Fargo Corporate Trust Services?

Wells Fargo Corporate Trust Services is the Central Servicing Agent (CSA) for all SBA 504 loans effective March 25, 2013. The CSA is responsible for processing loan payments and handling accounting for every SBA 504 loan nationwide.

Please note that Wells Fargo Corporate Trust Services does not provide any direct client services. All inquiries regarding your SBA loan should be directed to BFG and will be handled by our Servicing Department.

Can I payoff/prepay my loan early?

Yes.  SBA 504 loans are funded differently than conventional bank loans and have unique payoff terms and requirements.

  • Full prepayments are only accepted on the 3rdThursday of each month.
  • BFG must receive written notice 15 days in advance of the payoff date.
  • Payoff funds must be made via wire transfer
  • Prepayment premiums may apply. There is a declining premium applied to prepayments that adjusts at six month intervals.  Once half of the term of your loan has passed, there are no prepayment premiums.

The prepayment process is highly structured. If you wish to pay off your outstanding balance and/or discuss the SBA 504 loan prepayment process, contact Sylvia Willey at swilley@businessfinancegroup.org  or by phone at 1-800-305-0504.

Is my loan assumable?

If you are selling the building, a qualified buyer can assume your loan for a $1,000 assumption fee.  The pre-payment penalty does not apply in this instance.

Why is the rate on my loan different than what was estimated during the loan process?

The rate on the loan is determined approximately one week prior to the date the loan is funded and is based on current market conditions, which fluctuate.  Typically they follow the trends of treasure rates.  The loan is pooled with all of the other 504 loans funded in the same month and sold in the form of debentures.

Can I refinance my first trust deed loan without pre-paying my SBA loan?

Generally, your first trust deed loan from a bank or other lender has a higher interest rate than the SBA 504 loan.  If you decide to refinance this first mortgage, BFG will subordinate your SBA loan to a straight refinance of your first trust deed loan.  Cash-out may be allowed if the proceeds are used for building improvements.

Does my loan payment cover the property taxes for my property?

No.  SBA 504 loan payments only cover the principal, interest and fees of the loan.  It is the borrower’s responsibility to pay property taxes.  BFG does monitor each loan to insure they are paid annually.  If you have any questions regarding property taxes, please contact Sylvia Willey at swilley@businessfinancegroup.org.

Can I refinance my first mortgage?

The two loans involved with the SBA 504 project are now totally separate and you do not need out approval to refinance the first mortgage.  However, the new lender will probably make their financing contingent upon receiving a Subordination from the SBA.  If you plan on refinancing the first mortgage, please contact Angela Smith at asmith@businessfinancegroup.org .

What if I’m having trouble making my payments?

If your business has been struggling and you need to discuss it with us, please contact Angela Smith at asmith@businessfinancegroup.org.

What is my loan balance?

You can check your current loan balance at any time by referencing the Amortization Schedule we provided to you after your loan funded. To request another copy of the Amortization Schedule please send an email to swilley@businessfinancegroup.org

Note: The loan balance is not the same as the loan payoff amount.

How can I update my mailing address or other contact information?

Please send an email to swilley@businessfinancegroup.org  and include your phone/fax numbers, email address and website address.

Why do you ask for financial statements every year?

Submitting annual financial statements and/or tax returns is part of your commitment to BFG for your SBA loan.  We will send you a request for updated financials on an annual basis and ask that you submit them no later than three months after your fiscal year end.

You may submit updated financials by one of the following:

“We value our partnership with all of our lending partners who have contributed to our success.”

Atlantic Union Bank
Bank of America, N.A.
Eagle Bank
First Bank & Trust Company
Freedom Bank of Virginia
John Marshall Bank
M & T Bank
Old Line Bank
PNC Bank, N.A.
Towne Bank
Village Bank

Paul Kukla, VP PNC Bank

“BFG provides consistent great expertise and great service which gives me a level of comfort knowing that I have a great team supporting me and the customer. No matter the deal, no matter the stage in the process, they consistently go above and beyond expectations. I don’t know how you could find a better CDC partner than BFG; additionally, they are very nice people.

J.D. Zachry, Senior Vice President, Market Executive

My team’s partnership with Gerald Baroudi and BFG truly is paramount to our success as a commercial banking group in this community. Gerald values the client experience and represents what we, as community bankers, stand for as to meeting the needs of the business community. I can’t imagine going to market without having Gerald on our side!

Kathryn R. (Kathy) Speakman, Vice President and Commercial Loan Officer, National Capital Bank

They (Business Finance Group) are ultimate professionals and 504 experts, from the lender to their back office staff to the loan administrative group.  A top notch and well-managed team, they make closing loans easy.

Thomas Rea, President of Bank of The James, Shenandoah Valley Region

At Bank of The James, we pride ourselves on delivering excellent customer service and being able to put our customers in the best products for them. Business Finance Group shares those values and they have been a trusted partner to help us deliver the best to our customers. From a knowledgeable team that helps us brainstorm ways to help before the loan application, to the individuals who provide one on one support through loan underwriting, approval and closing. Top to bottom, Business Finance Group makes SBA 504 lending easy on the bank and a value add for our customers.

John W. Rock SVP/Government Lending Division

When I work with the Business Finance Group I have confidence in the company, their representatives and processing. I call Curt whenever I have a strategy question and he is always prompt with responsive ideas. When I work on a 504 project in Virginia, Curt is the first person I call.

Eugene Thomas, Jr, MBA,QIDP| Executive Director

“We have had the opportunity to work with BFG on six successful projects over eight years. BFG has been a major player in our success, substantial growth and job creation. The relationship with BFG has increased our profits and established several long real estate investments that will have positive long-term effects.”

Tom Eagleson, Biomic Sciences

The BFG team guided us through the SBA504 loan process from start to finish keeping us informed on every step. Some thought we would not be able to complete the process in a 5 month period but with BFG we hit our deadlines and closed the loan on time. Thank you BFG for being our partner and helping us achieve our dreams!

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