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Assumption
This occurs when a third
party wishes to acquire either the business and the building funded
or just the building and wants to assume the existing SBA 504 note
and the associated repayment schedule and terms.
Automated Clearing House (ACH) or Debit Payments
These are
payments paid each month from the borrower's selected checking
account. Payments on the SBA 504 loan are made by ACH debit to the
borrower's designated checking account on the first of each month
after the loan closes. Payments on the 504 loan are separate from
the borrower's payments on the 50% first mortgage loan. ACH is the
preferred means of payment, "wire transfer" is the only accepted
alternative.
Partial Release
This occurs
when a piece of collateral securing the SBA 504 loan is released in
support of the business. This typically occurs when a piece of land
included in the original agreement is released for new development
or by request of the local , municipality, e.g. road project
easements.
Prepayment
This is a payment of the
remaining balance of the SBA 504 loan made before the scheduled
maturity date of that loan.
Subordination
All SBA 504 loans
are secured by the building and property associated with the
business. Preferred holds a second mortgage while a primary lender
holds a first mortgage. In the event of a change in primary lender
(for example due to a refinance by a new lender), the new lender
must contact Preferred so that they remain in first mortgage
position. Otherwise, the new lender is subordinated to Preferred.
Wire Transfer
This is the process
which is used to transfer funds between the borrower's bank and the
SBA servicing agent. For fees associated with closing, monthly
payments, payoffs, or any other transfer this is the required
approach unless other arrangements are approved in advance by
Preferred. |
