|What is primarily financed?
||Owner-occupied commercial real estate and equipment over a long loan term.
||Working capital, inventory, equipment, stock, or any other business asset and/or debt to be refinanced.
|Why is it typically used?
||Up to 90% loan-to-cost financing; 20-year fixed rate on second mortgage.
||Ability to enhance credit, offer longer terms than allowable conventionally, or mitigate a collateral shortfall.
||First mortgage made by and serviced by a third-party lender or Mercantile in certain situations; second mortgage originated by Mercantile, subsequently sold in a debenture, and serviced by SBA.
||Single loan extended and serviced by a lender, which SBA guarantees.
||Maximum 1st mortgage: $250,000 – no limit
Maximum 2nd mortgage: $200,000 – $5 million*
* $5.5 million for green projects.
|$250,000 to $5 million
||1st Mortgage: typical conventional pricing
2nd Mortgage: below-market fixed interest rate
|Typically floating at Prime+1% or higher with fixed rates about 1% higher than floating rates.
||1st Mortgage: 10 years minimum, with 20–25 year amortization.
2nd Mortgage: 20 years, fully amortizing
|Up to 25 years, fully amortizing for real estate.
Up to 10 years, fully amortizing for all other uses.
||Minimum 10% of total project cost (real estate, construction/renovation, equipment, closing costs, soft costs)