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First use of SBA refinance program in Michigan by Economic Development Foundation and Tapper Automotive.
Economic Development Foundation assists John H. Tapper Automotive in freeing up capital for other projects by refinancing existing real estate loans.
In late 2007, Tapper Automotive worked with Keystone Community Bank and constructed a new dealership in Paw Paw, Michigan. While the location has proven to be successful for the company, the dealership recently recognized the SBA’s debt refinancing program as an excellent means to create more flexibility in the use of capital for the future needs of the company.
Typically, the Economic Development Foundation (EDF) works with a partner bank, and the US Small Business Administration’s 504 loan program to help customers purchase new fixed assets. In this case, the Economic Development Foundation was the first in Michigan to use the temporary SBA refinance program allowing Tapper Automotive to refinance existing eligible fixed assets in its 504 program without the requirement of an expansion as is the case with typical 504 loans.
The program is structured similar to SBA’s traditional 504 loan program: borrowers will work with third-party lending institutions and SBA-approved Certified Development Company, such as Economic Development Foundation to obtain financing, in a traditional 10%down/50% bank loan/40% SBA loan split. This program will provide small businesses the opportunity to lock in long-term, stable financing, as well as protect jobs and create jobs.
“This is the first use of the 504 debt restructuring program in the state of Michigan,” said Sandy Bloem, executive director of EDF. “The benefits to a company are enormous: To create long term, fixed rate financing at extremely attractive rates should not be passed up.’
Economic Development Foundation was created in 1981 to work with the US Small Business Administration and private sector lenders to provide much needed financing to small businesses through the SBA 504 loan program. The SBA 504 loan program serves as a financing tool using lower down payment, lower rates, and longer terms than conventional bank financing. Economic Development Foundation (EDF) maintains a highly knowledgeable staff with over 100 years of combined financial experience serving the needs of small business owners throughout Michigan. For additional information regarding EDF and the SBA 504 loan program, call (616) 459-4825 or visit www.growmichigan.com.