Midwest Business Capital is One of the First Two Banks in the Country to Close a Small Business Administration 504 Loan Pool

Midwest Business Capital becomes one of the first two financial institutions in the country to take advantage of an important SBA loan program to assist small business lending and aid job growth.

Oct 01, 2010, 08:50 ET from Midwest Business Capital

COLUMBUS, Ohio, Oct. 1 /PRNewswire/ -- Midwest Business Capital (MBC) (www.midwestbusinesscapital.com) closed a SBA 504 first mortgage loan pool on Friday making MBC one of the first financial institutions in the country to structure such a pool. Midwest partnered with Houston Texas based Coastal Securities who acted as the pool investor. This important SBA program will create a secondary market for the SBA 504 loan program which is used by small businesses to finance the acquisition of commercial real estate and equipment. The creation of a secondary market for these loans will bring liquidity to community banks allowing them to provide additional loans to help job creation and spur economic growth.

Dick Witherow, President of MBC said "Working with our partner Coastal Securities, we are delighted to be one of the first lenders in the country to take advantage of the 504 loan pool program. We have been actively making SBA 504 first mortgages allowing small business owners to finance the acquisition of owner occupied real estate. The start of the pooling program will allow us to continue to originate these loans for our customers."

MBC is one of only twelve 504 Pool Originators approved by the SBA. A Pool Originator can structure 504 loan pools with their own loan originations or include loans originated by other banks.

The SBA 504 loan program has terms that can be more attractive than conventional bank financing and is specifically designed to help businesses acquire new land, buildings and equipment. Loans can be structured to finance up to 90% of the value of the assets to be acquired with maturities of up to twenty five years on real estate and ten years on equipment. The First Lien Position 504 Pooling Program which is part of the American Recovery Act enacted by Congress in 2009 allows financial institutions to securitize 80% of the first mortgage position of a 504 loan with an SBA guarantee. The security that is created can then be sold in the secondary market freeing up liquidity allowing the originating bank to make more loans to small businesses.  

Midwest Business Capital a division of United Midwest Savings Bank specializes in providing owner occupied commercial real estate financing using SBA and USDA loan programs. MBC also focuses on dental and medical practice lending. MBC originates loans on a national basis and has an office in Salt Lake Utah. MBC is a designated PLP (Preferred Lender Program) lender by the SBA.

SOURCE Midwest Business Capital