What collateral is taken to secure the CTCIC 504 Loan?
Collateral taken to secure the CTCIC 504 Loan typically includes: a second mortgage on the land and building being financed, a second lien on any machinery, equipment and/or fixtures that are financed, unsecured personal guaranties from any principal with greater than 20% ownership, and lease assignments. An owner’s personal home is not usually required as collateral. In the majority of projects, the Project Property will be the sole collateral securing a CTCIC 504 Loan. Additional collateral is only required when there is a deficiency in the appraised value of the Project Property or when other serious credit issues are apparent.
