What is the banks role?
For 504 loans the bank will process the application as it would any loan request. BEFCOR will share its credit underwriting analysis with the bank to accelerate the time to loan approval.The bank loan officer should make sure all appraisals and environmental reports are ordered naming the bank, SBA and BEFCOR, as intended report recipients.Once the bank commitment letter is received it is sent to SBA with the 504 application package.The bank can close the loan using its own loan documents after the SBA has approved the 504 project.Generally the bank provides all of the funds to complete the project in excess of the owner’s down payment during the construction period, based on the SBA agreement to pay down the bank’s loan by the amount of the 504 loan.When the project is completed, as evidenced by a certificate of occupancy, the 504 loan can close. The bank will need to provide copies of its loan documents, documentation of all of the project costs funded and will need to state that no
