REsource Capital - Real estate financing for growing businesses

Many 504 borrowers have obtained second or third SBA 504 Loans to finance additional locations, expand existing locations, or purchase major machinery and equipment. Subsequent applications are simplified since REsource Capital already has an active file of information, and therefore your loan request can usually be processed with a minimum of paperwork. Contact us to find out about your eligibility to obtain another SBA 504 Loan.

Payments are due on the first business day of each month, and are made by automatic debit. Late are due if payment is received after the 15th of the month.

In the loan closing process, you designated an account from which payments will be debited, by filling out a form and providing a voided check. The account number of your designated account is referenced in the Notification of Funding letter which was provided shortly after your loan funded. This letter also included your payment amount, effective note of interest, and general ongoing requirements.

You may change the bank account for purposes of the automatic payment at any time; however, please note that changes must be received in our office by the 10th of the month in order to become effective for the following month's payment. Payments must be made by automatic debit. Checks are not accepted.

Please complete a new "ACH Form" and mail it back to our office at:

1050 Iron Point Road, Folsom, CA 95630

Feel free to call us at (916) 962-3669 if you have questions concerning the form. The completed "ACH Form" and voided check must reach our office before the 10th of the month to be put into effect for the following month.

Colson Services Corporation is our Central Servicing Agent (CSA). This corporation handles the payment processing and loan accounting for all SBA 504 Loans. You will notice a notation on your bank statements referencing Colson Services followed by your loan number.

If you have any questions or problems about payments, please contact REsource Capital. Colson Services Corporation does not handle any client phone calls. Any correspondence regarding your loan payments should be directed through REsource Capital.

SBA (Small Business Administration). The fee paid to SBA represents a guarantee fee required under the Code of Federal Regulations (CFR) to cover a loss reserve for the program.

CSA (Central Servicing Agent). The CSA is also known as Colson Services Corporation. The CSA fee covers charges by Colson Services Corporation to handle payment processing and loan accounting. Colson Services Corporation is appointed by the SBA to accept monthly payments, hold the monthly payments until the semi-annual debenture payment is due, pay the semi-annual debenture payments, and calculate and accept full payments on the SBA 504 Loan.

CDC (Certified Development Company) and for purposes of this website also known as REsource Capital. The CDC is required to service the loan on behalf of the SBA by enforcing the terms of the loan documents. The CDC fee is set forth in the Code of Federal Regulations to pay for the servicing of SBA 504 Loans and cannot be waived.

Servicing Fees. Your total payment includes the Note payment and the three (3) fees payable to the SBA, CSA and CDC (see FAQ #7). Every five (5) years, the fees are adjusted downward and payment is decreased. Please refer to your Amortization Schedule for balance, payment, and fee information.

Your Note Rate is shown on the Note and Amortization Schedule included with your loan documents. The rate stated on the Note does not include the SBA, CSA and CDC servicing fees (see FAQ #7); however, the "Effective Rate" as referenced in your Notification of Funding letter does include these fees. Although the interest rate on the Note is fixed, payments are lowered every 5 years as the fees are adjusted.

The rate on the loan is determined approximately one week prior to the date the loan is funded. Your loan is pooled with all of the other SBA 504 Loans funded in the same month, and is then sold in the form of debentures on the bond market. Debentures are priced based on current market conditions. Rates typically follow the trends of US Treasury rates, although rates on 504 debentures are higher.

Check the loan Amortization Schedule provided to you after your loan funded. If you can't locate the Amortization Schedule, contact our office for a copy. Please note that the loan balance is not the same as the loan payoff amount.

Annually, a Form 1098 is provided to the borrowing entity stating the interest paid on the loan for the most recent calendar year. Alternatively, you can check the Loan Amortization Schedule provided with your other loan documents. If you have had late payments or a deferment of payment(s), the information in your amortization schedule may not apply and you should refer to Form 1098 or contact us for correct information.

Yes, loans are funded via the sale of bonds which requires a slightly different payoff process than a typical bank loan. Partial prepayments are not accepted. A possible alternative to loan payoff may be loan assumption. Please contact us right away if you are considering loan payoff or loan assumption.

Prepayment of an SBA 504 Loan:

• REsource Capital must have 45 days written notice that the loan is going to prepay. Payoff dates for SBA 504 Loans are the 3rd Thursday of each month.
• A $1,000 good faith deposit via wire transfer is required to lock in your prepayment date and is not refundable if your loan does not payoff. The deposit is due 10 business days prior to the scheduled pre-payment date.
• 504 loans must be prepaid on the 3rd Thursday of any month.
• All deposits and payoffs must be made by wire transfer.
• Prepayment premiums may apply. Prepayment premium levels decline at six (6) month intervals based upon loan funding month; and are eliminated once half of the term has passed (i.e., after 10 years, there is no prepayment premium for a 20 year loan. After 5 years, there is no prepayment premium for a 10 year loan).

Prepayment of an SBA 503 Loan:

• REsource Capital must have 45 days written notice that the loan is going to prepay
• 503 loans can only be prepaid on the 2nd and 4th Thursdays of any month except November and December when loans can only be prepaid on the 1st and 3rd Thursdays of any month due to holidays.
• If your loan funded after June, 1985, a $1,000 good faith deposit is required to lock in your prepayment date and is not refundable if your loan does not payoff. The deposit is due via wire transfer 10 business days prior to the scheduled prepayment date.
• All deposits and payoffs must be made by wire transfer.
• Payoffs may include a prepayment premium or discount, depending on the Note rate of the loan and the current interest rates.

You must carry insurance levels on your building as noted in your SBA 504 Loan Authorization. The U.S. Small Business Administration must be shown as 2nd Mortgagee and Loss Payee with Form 438 BFU, CP218, or a comparable form. Evidence of insurance must also show the amount of coverage on the building and include replacement cost coverage. Please show the 2nd mortgagee and loss payee on the insurance policy as follows:

U.S. Small Business Administration
& EDF Resource Capital, Inc.
1050 Iron Point Road
Folsom, CA 95630

A general rule of thumb to determine the required dollar amount of coverage needed is to subtract the "Land value" from the "As completed value" found in your appraisal.

It is good practice to protect your investments; however, SBA only requires the loss payable form - such as 438 BFU, CP1218, or comparable form - for business personal property when Security Agreement and UCC Fincancing Statement are included and filed as part of your collateral with your SBA 504 Loan.

The flood service we retain is First American Flood Data Service, 11902 Burnet Rd., Austin, TX 78758 (ph: 1-800-447-1772). When a property we have registered with them is no longer in a flood zone, our office is notified and we will inform you that flood insurance is no longer required.

Yes, we would appreciate the information about your new agent. Helpful information includes your agent's name, address, phone number, fax number, if available, and your policy number.

You are responsible for paying the prperty taxes. No escrow for property tax payments or impound account on the real estate has been included with your loan. Please check with the County Tax Collector or Assesor in which your property is located to determine when your real property taxes are due.

The submission of annual financial statements and/or tax returns are part of the loan commitment. Please submit your annual business financial statements and/or tax returns to our office no later than three (3) months after your fiscal year end.

A requirement of the SBA 504 Loan was to create and/or retain a certain number of jobs. REsource Capital is required by the US Small Business Administration to obtain this information at the two year anniversary of the loan funding date.