Silicon Valley Business Journal Interviews Capital Access Group VP Claudia Cohen
The Silicon Valley Business Journal recently sat down with Claudia Cohen from Capital Access Group. As the #1 504 lender in the South Bay, the reporter was interested in Claudia’s perspective on recent trends in the 504 program, including changing market conditions in the South Bay region and how recent rule changes are making it easier for certain clients to take advantage of the program. Here are a few excerpts from this in-depth look at the 504 program:
Market trends: Claudia discussed the low supply of buildings in the South Bay and the competitive bidding that is making it more difficult for small businesses to compete in the area.
How Capital Access Group is adapting: Claudia mentioned the steps they are taking to help small business clients compete, including encouraging brokers and lenders to get their clients prequalified “as soon as they start looking.”
Larger loans: The reporter, Bryce Druzin, asked why Capital Access Group’s average loan size increased dramatically from fiscal year 2012 to 2013. Claudia said that this is partly a result of Capital Access Group’s efforts to educate the marketplace and overcome the perception that the 504 program is only for small businesses, when in reality, the SBA considers a small business to be one that has net income up to $5.5 million and a net worth of $15 million. “That’s a pretty large company,” according to Claudia.
Rule changes: The SBA’s recent rule changes to the program were also discussed. The first rule change overturned the 9-month rule, which now “allows us to do financing for longer-term construction projects.” The second rule change eliminated a personal resource test that made some borrowers with more personal liquid assets ineligible for SBA financing that otherwise “would be eligible in terms of the company size of net income and net worth.” Both of these rule changes expand access to capital by removing these restrictions on eligibility.
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