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--- cdc_504_loans [2024/11/05 19:12] – created admin
+++ cdc_504_loans [2024/11/05 19:55] (current) – admin
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 [[https://www.sba.gov/funding-programs/loans/504-loans|SBA 504 Loans]]
+Prompt used in Anthropic
+can you help write a bpmn model for this Overview
+The SBA 504 loan program is a small business financing option that provides long-term, fixed-rate financing for major fixed assets like real estate and equipment.
+Structure
+First Mortgage (50%): Conventional lender
+Second Mortgage (40%): CDC/SBA portion
+Down Payment (10%): Business owner
+May increase to 15% for new businesses
+May increase to 20% for special-use properties
+Step 1: Prequalification
+Verify business eligibility:
+For-profit business
+Net worth under $15 million
+Net income under $5 million after taxes
+Owner must occupy 51%+ of property
+Project must create/retain jobs or meet public policy goals
+Gather required documentation:
+Business financial statements (3 years)
+Tax returns (3 years)
+Business plan
+Personal financial statement
+Real estate information or equipment specifications
+Project costs breakdown
+Step 2: Application Process
+Identify and apply with a Certified Development Company (CDC)
+CDC is a nonprofit organization certified by SBA
+Will assist with application package
+Helps structure the deal
+Secure conventional lender for first mortgage
+Usually a bank or credit union
+Must provide minimum 50% of project cost
+Conducts own underwriting process
+Complete CDC/SBA application package:
+SBA Form 1244
+Business organization documents
+Environmental studies
+Real estate appraisal
+Equipment appraisals (if applicable)
+Construction plans (if applicable)
+Step 3: Underwriting
+CDC Review
+Analysis of business financials
+Verification of job creation/retention
+Project feasibility study
+Credit analysis
+SBA Review
+Final approval authority
+Reviews CDC recommendation
+Issues authorization if approved
+Step 4: Closing Process
+First Mortgage Closing
+Conventional lender closes their portion
+Funds held in escrow
+CDC/SBA Debenture Closing
+CDC prepares closing documents
+SBA reviews and approves
+Debenture sale scheduled
+Funding
+Debenture sold to investors
+Funds disbursed
+Project completed
+Step 5: Post-Closing Requirements
+Ongoing Reporting
+Annual financial statements
+Tax returns
+Insurance certificates
+Job creation verification
+Compliance Monitoring
+CDC annual inspections
+Occupancy requirements
+Job creation/retention verification
+Insurance maintenance
 <bpmnio type="bpmn">