TMC Financing Ends Fiscal Year up 47%

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Top SBA Lender Provided $706 Million in Financing for Commercial Real Estate

SAN FRANCISCO, Calif.--(BUSINESS WIRE)-- TMC Financing, the No. 1 Small Business Administration (SBA) 504 commercial real estate lender in Northern California and Las Vegas, today reported its strongest fiscal year results in the company’s 30-year history.

For the fiscal year ended September 30, 2011, TMC financed $268 million in SBA 504 commercial real estate loan debentures, a 47% dollar increase over the previous year, providing $706 million in total project financing. TMC’s 304 loans represent a 38% increase in loan volume over the prior year.


TMC territory	No. of SBA 504 loans	Total project financing
Northern California	140	$	312,836,117

Southern California	134	$	345,494,542

Las Vegas, Nevada	30	$	47,671,268

TOTAL	304	$	706,001,927

SBA 504 loans enable business owners to purchase, renovate or construct commercial real estate with as little as 10% down, using below-market, fixed rate financing. Loans are structured with a first mortgage from a conventional lender typically at 50%, and a second mortgage from a Certified Development Company (CDC), such as TMC Financing, typically at 40% and backed by the SBA. Conventional loans usually require 25% down, making SBA 504 loans attractive for business owners who are intent on cash preservation.

Exceeding pre-recession levels

“Our business has rebounded to pre-recession levels,” says Barbara Morrison, TMC’s president and CEO. “Our previous record year was 2007, and we are proud to have exceeded that benchmark in 2011.”

Morrison explains that TMC is working with companies that survived the economic downturn and are now growing and require new space. While traditional financing may still be difficult to obtain for some businesses, many owners are turning to SBA 504 loans to bridge the gap.

“It’s especially gratifying,” Morrison adds, “to enable so many small business owners to purchase, renovate or construct new property at a time when conventional wisdom says money is not available to them.”

The upward trend in lending is borne out by national figures. In fiscal year 2011, the total value of SBA 504 loans nationwide increased by 8% over 2010, and by 25% over 2009 volume, according to the National Association of Development Companies (NADCO). The total number of SBA 504 loans that were approved increased by 2% from 2010 to 2011.

In California, the total value of SBA 504 loans increased by 3% from 2010 to 2011, with 4.5% more loans being approved.

Growing businesses mean more jobs

“Without the assistance of the SBA 504 loan program, a majority of these projects would never have come to fruition,” says Morrison. “By giving businesses access to capital, we help them grow and create jobs.”

For the 2011 fiscal year, TMC’s borrowers were able to retain 7,962 jobs, and are expected to create 2,680 new jobs in California and Nevada over the next two years.

Provisions included in the 2010 Small Business Jobs Act that make more businesses eligible for larger loans are one reason for the jump in loan volume. There is no cap on the amount of the first mortgage loan provided by the conventional lender. The second-mortgage SBA 504 loan cap increased from $2 million to $5 million ($5.5 million for manufacturing and green energy projects). Larger companies are able to obtain 504 loans - businesses with up to $15 million in net worth and $5 million in average net income are now eligible.

Revamped SBA 504 debt refinancing program

In October SBA drastically revamped the temporary SBA 504 debt refinance program in an effort to reach more business owners. Many owners who purchased property at the height of the market now face the daunting task of refinancing a property that has decreased in value. For a limited time these owners can use low, fixed rate SBA 504 loans to refinance existing, non-SBA, underwater commercial mortgages with 90% financing on the appraised value. The biggest program revision is that owners can now use the difference between their equity and 90% of the appraised value for working capital. SBA hopes that this and other recent changes will encourage more business owners to take advantage of this refinancing in the next 12 months.

ABOUT TMC

During the past 30 years, TMC has provided $6.4 billion in financing for more than 3,900 businesses throughout California and Nevada. This financing has resulted in the creation of over 27,000 jobs. TMC has been ranked in the top five Certified Development Companies nationwide for over a decade, and is the number one SBA 504 Lender in Northern California and Las Vegas.

TMC's experienced staff works directly with borrowers, first mortgage lenders and real estate brokers to tailor financing packages that meet SBA program guidelines and the borrower's credit capacity. For more information, visit www.tmcfinancing.com.