Capital Solutions are critical in effectively managing the fixed asset growth of your business. The U. S. Small Business Administration's (SBA) 504 Loan Program is the most attractive fixed asset financing tool available to expanding businesses today. With a 504 loan funded through Six Bridges Capital Corporation (6BCC), a business can finance the purchase of land, buildings, machinery, equipment, building construction and all associated soft cost, i.e. interim interest during construction, attorney, accountant, architect and appraisal fees, and title insurance, etc.

For healthy and expanding businesses with a good track record and promising growth potential, 6BCC, in partnership with your Bank, can provide fixed rate, low downpayment, fixed asset financing that will preserve your working capital for future sales growth.

I. 504 Benefits

1. Up to 90% financing for fixed assets, including associated soft costs
2. 10 or 20 year terms, fully amortized, no balloons or call features
3. Fixed, below-market, interest rates
4. Minimized downpayment requirements
5. Increased cash flow through extended repayment terms

II. Eligible Businesses

1. Any for profit business
2. Any legal entity: Sole Proprietorship, Partnership, Corporation, LLC, LLP, etc.
3. Any type of legitimate business: manufacturing, wholesale, service, retail or agricultural
4. Located in the State of AR, TN counties of Shelby, Tipton, Fayette, MS counties of Desoto, Tunica, Marshall, Tate, TX county of Bowie
5. Net Worth is less than $7 million
6. Two-year average after-tax profits is less than $2.5 million
7. Business owner must be a U. S. citizen or a legal resident alien

III. Ineligible Businesses

1. Private restrictive clubs and speculative real estate investment
2. Businesses primarily engaged in lending i.e. banks, credit unions, finance companies, etc.
3. Insurance Companies, although independent insurance agencies are eligible
4. Offshore facilities
5. Business that derive a significant portion of their revenue from speculative operations i.e. commodity traders
6. Lobbyist
7. Businesses with more than 1/3 of their revenue from legalized gambling

IV. Other Restrictions

1. 6BCC does not provide interim construction financing. A 504 loan is only permanent take-out financing.
2. $1,500,000 is the maximum 504 gross loan amount (unless the project meets SBA's Public Policy Goals or is a small manufacturer in which the maximum amounts are $2,000,000 and $4,000,000 respectfully)
3. $50,000 is the minimum 504 gross loan amount

V. General Loan Structure

Through the 504 loan program, 6BCC can provide up to 40% of total eligible project cost as follows:

* The 504 loan amount and the required borrower's contribution will depend upon the type of project and the historical performance of the business.

Additional information regarding Borrower's Equity Contribution.

VI. Eligible 504 Project Costs

1. Purchase of land and buildings
2. Building expansion and remodeling
3. New construction
4. Machinery and equipment
5. Soft cost such as interim interest during construction, attorney, accountant, architect and appraisal fees, and title insurance, etc.

Additional information regarding eligible and ineligible project costs.

VII. Rates and Terms

The rate on a 504 loan is set when the permanent loan is "closed". This typically occurs 90 to 120 days after the completion of construction or the purchase of real estate, machinery, etc. The rate is then fixed for the term of the 504 loan.

VIII. Permanent First Mortgage Lender's Responsibilities

The SBA requires that the permanent first mortgage loan, provided by the bank in participation with a 504 loan, must fulfill the following conditions:

1. The Bank's interest rate may be fixed or adjustable.
2. The Bank's term shall not be less than 10 years if requesting a 20 year 504 loan or 7 years for a 10 year 504 loan.
3. The Bank's note and other lien instruments must not contain future advance clauses except advances for the reasonable costs of collection, collateral maintenance or protection of the bank's lien(s).
4. The Bank's first mortgage loan can not be cross-collateralized with other financing provided by the Bank.

IX. Collateral

1. A 504 loan is typically secured with a subordinate lien on all project assets.
2. SBCC can recognize existing liens in the case of the expansion of existing buildings.
3. Personal guarantees of all principals owning more than 20% of the company are required.
4. If the business is a start-up or the asset being financed is considered single purpose or the credit is unusually risky, additional collateral may be required.
5. Key man life insurance is typically required unless there is strong management succession.

X. Fees

The SBA 504 loan program is self-funding with no subsidy from the federal government. As a result, a portion of the issuing costs and monthly servicing fees for each 504 loan is applied to a loan loss reserve.

All of the fees on the SBA 504 loan are added to the loan amount so that the cost can be amortized over the term of the loan. Closing costs include fees paid to SBA, the underwriter and 6BCC (totaling 2.75% for a twenty year 504 loan and 2.63% for a ten year 504 loan). Legal cost is also necessary to close a 504 loan and should not exceed $2,500, which may also be financed with 504 loan proceeds.

Finally, the first mortgage lender must pay SBA a one-time fee equal to .5% of the bank's permanent loan.