Closings

SomerCor 504 loan transactions can only fund 12 times per calendar year (6 times a year or every other month for equipment-only transactions) or once a month. SBA 504 Loans typically fund on the 2nd Wednesday of each month. In order to get you loan funded, your SomerCor closing officer will need to finalize all documentation at the beginning of the month prior to funding (e.g. To participate in the February funding, all closing documentation must be received by the first week of January). PLEASE NOTE: NO LOAN CAN FUND UNTIL ALL PROJECT IMPROVEMENTS HAVE BEEN COMPLETED AND ALL ASSOCIATED CONSTRUCTION DRAWS ARE FULLY PAID.

 CLICK HERE FOR OUR CLOSING STAFF DIRECTORY.

Below is a simple list of the items typically required to close a 504 transaction.

Borrower required documentation:

1. Organizational and corporate documentation. If a corporation is involved, SomerCor requires articles of incorporation and by-laws. If an LLC is involved, SomerCor requires articles of organization and the operating agreement; Additionally, SomerCor will need the Employer Identification Number (EIN) for the borrowing entity;
2. Name and phone number of your hazard insurance agent;
3. Current interim financials (balance sheet and income statement) dated within 120 days of 504 closing;
4. Lease between borrower and operating entity with a term of at least 20 years (term may get to 20 years with options). Lease MUST be subordinated to SomerCor mortgage. Download a lease sample.
5. Voided check for Automatic Debit (ACH) for SBA loan payment;
6. If your project involved substantial construction, the local municipality’s final use and occupancy permit is required along with a NEHRP letter from the general contractor or architect;
7. Current ALTA survey of the property being financed. If your project involved substantial construction, an ALTA survey must be done post-construction;
8. Evidence of required borrower capital contribution to project. Sufficient evidence typically includes the following items: (a) Fully executed, certified, stamped copy of the real estate settlement statement produced at the closing of the transaction; (b) front and back copies of cancelled checks coupled with associated invoices;
9. If life insurance is required for your loan, please provide a full copy of the required life insurance policy. SomerCor will work with you to obtain the necessary collateral assignment of this policy;
10. If your loan involves a franchise, please provide the final, fully executed copy of your associated franchise agreement;
11. SomerCor will also prepare all associated SBA and SomerCor required loan documentation which must be executed by the appropriate parties;

Bank required documentation:

1. Copy of your executed permanent 1st note and mortgage (Please note that term MUST be 10 years for real estate deals, 7 years for equipment only deals);
2. Copy of your executed interim 2nd note and mortgage;
3. Copy of your title company issued loan policy;
4. Wire transfer instructions to pay down the interim financing;
5. Check made payable to SomerCor 504, Inc. in the amount of .5% of your permanent 1st loan amount (termed the “participation fee”);
6. Current ALTA survey of the property being financed. If your project involved substantial construction, ALTA survey must be done post-construction;
7. SomerCor will also prepare all associated SBA required loan documentation to be executed by your financial institution.

PLEASE NOTE THAT THE ABOVE-REFERENCED LISTS CONSIST OF THE TYPICAL REQUIREMENTS FOR MOST 504 LOAN TRANSACTIONS. YOUR SPECIFIC DEAL MIGHT REQUIRE ADDITIONAL DOCUMENTATION. PLEASE CONSULT WITH YOUR SOMERCOR CLOSING OFFICER FOR SPECIFIC DOCUMENTATION REQUIREMENTS.

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