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Mythbusting and Monster Hunting

5/2/2014

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My 10 year old son Liam and I watch nearly every show we can about “monsters” in America.  We both know that there is a ton of false information and fakery being spit out about by hucksters and charlatans.  We also know that many of the people mean well, but they do not always use the best science to back up their claims.   However, there is still nothing funnier than watching Wild Bill from Mountain Monsters fall out of a tree or off of a crane every week.  The cool part about Wild Bill is he always gets back up with a smile on his face. 

Seeing folks chase, but never catch, Bigfoot, The Fire Dragon or the Werewolf of Webster County is great fun for us.  However, watching these shows made me realize that there are some myths about the 504 Real Estate Advantage loan that keep getting perpetuated, but do not seem to get debunked.

Myth 1 Paperwork

The borrower actual has to complete very little paperwork to apply for the loan.  A short application and a few brief forms are all that we require.  We can use the rest of the information that the borrower provides to the bank.  We make the application very easy. 

Status:  Debunked!

Myth 2  Dealing with Government  

Though dealing with the government can be scary, the borrower does not have many dealings with the Feds in the 504 process.  We handle all of the paperwork, all of the communications and all of the servicing.  You deal only with Donna or me.  Enterprise Development Corporation is not part of the SBA.  It is a small business that has the same daily issues and pressures that the borrower does as a business owner.  We have to make payroll, pay expenses and make sales.  We understand the issues the borrower faces.    

Status:  Debunked!

Myth 3  Down Payment

Some people are still confused about the down payment required for the 504 Real Estate Advantage loan.  If the facility is not for special use or if the business is a going concern and not a start-up, the down payment is usually 10%.  This is smaller than other SBA loan requirements and it is also smaller than the down payment required by the bank.  Even in times of increasing interest rates, the savings a borrower realizes on this small down payment is HUGE.  It is still a great deal. 

Status:  Debunked!

 Myth 4  Rising Interest Rates

Interest rates for the 504 Real Estate Advantage loan are rising.  There is no debating that point.  And, rising rates certainly make borrowing more expensive.  However, since the interest rate offered for the 504 is fixed, the client has hedged the borrowing “gamble” by guaranteeing a known fixed payment every month.  If rates continue to rise, as they have historically, the borrower still gets a great locked in payment for the life of the loan. 

Status:  Debunked

I hope this has answered some questions regarding the 504 loan and debunked some myths.  Busting myths about the 504 Reals Estate Advantage is not nearly as fun as hearing a bigfoot hunter say “Sasquatch keeps coyotes as pets” (My son looked at me inquisitively when this was stated with earnest factualness, and then fell out of his chair laughing hysterically).  I can, however, prove everything I have stated.  By the way, I wonder if Bigfoot leashes his coyote on walks and scoops when the coyote does his business?  Or maybe coyotes are intelligent and keep Bigfoot as a pet?  I have too many deep thoughts and ponderings for a single blog.    

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