MCC February Construction Closings!

MCC is pleased to announce the following construction project was completed last month:

MCC's 504 Loans vs. Conventional Loans

By allowing small businesses to put less money down and minimize their cash flow considerations, MCC makes owning real estate an option for many businesses that otherwise might not have the opportunity. Businesses can use their excess capital and increased cash flow to concentrate on growing their business instead of putting it into their real estate (a non-income-producing asset), while at the same time get the benefits of owning instead of leasing. Our 504 loans provide 90% financing for commercial real estate with low monthly payments at below market interest rates and in the process, create new jobs for the community with our clients' "equity savings".

	Conventional Bank Loan	Mercantile Commercial Capital (504 Loan Program)
Loan Amount	75% to 80% of the lesser of appraised value or purchase price.	90% loan-to-cost (90% financing of total project cost, inclusive of soft costs, closing costs, and renovations).
Equity	20 to 25% plus closing and soft costs.	10% of the total project cost.
Term	Frequently 5, 7, 10 or 15 years, then balloons.	1st Mortgage : 20 or 25 years 2nd Mortgage : 20 years Usually 23 years blended. No balloons, rate just resets.
Amortization	15 or 20 years.	1st Mortgage : 20 or 25 years 2nd Mortgage : 20 years Usually 23 years blended. Fully amortizing.
Pricing	Competitive fixed or variable rates.   Usually not assumable.	1st Mortgage: Competitive fixed or variable rates. 2nd Mortgage: Least expensive financing available for commercial real estate. Usually 0.5 to 0.75% less than competitive rates and fixed for 20 years. The blended, effective rate of the 1st and 2nd mortgages is nearly always lower than conventional financing and is fixed for a longer period of time.   Loans are assumable.
Personal Guarantees	Frequently has them.	Has them, but for strong credits, can be limited to pro rata ownership.
Prepayment Penalty	Sometimes has them, but frequently not.	1st Mortgage: 5 or 10 year options with up to 20% of paid principal allowable annually without penalty. 2nd Mortgage: 10 year, but because it is the least expensive financing it makes better sense to prepay the 1st mortgage with excess cash.
Debt Service Coverage	Usually 1.2 X or higher with Maintenance. Usually no start-ups.	At least 1.0x, frequently without maintenance. Can do start-ups for good personal net worth borrowers with good industry experience.
Loan Fees	Usually 0.5% to 1% of loan amount.	Usually 1.5% of 1st mortgage and 1% of 2nd mortgage. Blends to 1.27% of loan amount.
Personal Credit Scores	Usually no less than 650.	Usually no less than 600.

Learn More...

For more information about MCC's exciting news or our 504 Loan Program that provides 90% financing of total project costs with longer amortizations at below market, fixed interest rates, please visit MCC online at www.504experts.com, or call toll free at 866-622-4504.

 

Respectfully yours,

_________________________________________________________________________________________