Frequently Asked Questions

Texas Panhandle Regional Development Corporation (TPRDC) is a non-profit organization certified by the SBA as a certified development company (CDC) to provide funding for small businesses under the SBA 504 program. There are approximately 290 CDCs nationwide, some of which have the 504 loan as their sole product, while others offer a range of small business programs in addition to the 504 loans.

 

 

·        Enhanced cash flow

·        Low down payment

·        Long-term financing at low interest rates

·        Predictable monthly payments

 

·        Legal entity – corporation, partnership, sole proprietor, limited liability company

·        Located in the United States

·        Net worth under $15 million and net profits under $5 million

 

 

·        For most projects the borrower will inject 10% of the project’s cost

·        New businesses (in operation less than 2 years) OR a special/single use facility, the borrower will inject 15% of the project’s cost

·        New businesses (in operation less than 2 years) AND a special/single use facility, the borrower will inject 20% of the project’s cost

 

While there is no limit on the total project cost, TPRDC’s limit is: $5,000,000 for regular projects and $5,500,000 for eligible manufacturing loans and for loans that incorporate energy saving technologies for sustainable design.

 

·        The purchase of land, including existing buildings

·       The purchase of improvements, including: grading, street improvements, utilities, parking lots and landscaping

·        The construction of new facilities or modernizing, renovating or converting existing facilities

·        The purchase of long-term machinery and equipment

·        The 504 Program cannot be used for: working capital, inventory, or consolidating/repaying debt

 

What are the costs associated with the 504 loan program?
All of the fees associated with the SBA 504 loan (approximately 2.8% of the SBA portion) are added to the loan amount so they are amortized over the loan term and do not represent any "out of pocket" expenses for the small business owner. Payments on the SBA 504 loan are made by ACH debit from the small business owner's designated checking account on the first of each month after the loan funds. Payments on the SBA 504 loan are separate from payments on the 50% first mortgage loan.

 

 

 

The micro-loan program was designed to provide small businesses with increased access to capital in the City of Amarillo. This program creates job opportunities and provides a means for a business to grow.

 

Any applicant of the program must fall under the income restrictions established by HUD. There are also equity requirements that can vary between 5% - 15% based on the merits of the project.

Activities to be financed may include, but are not limited to:

·        Business and industrial acquisitions, construction, etc.

·        Purchase and development of land, buildings, etc.

·        Purchase of equipment and business supplies

·        Purchase of machinery or business vehicles

·        Remodeling/improvements

·        Start-up costs, working capital, or gap financing

 

The minimum loan amount for the program is $2,000 and the maximum is $35,000.

 

The length of the loan will coincide directly with the use of proceeds of the loan. A project that involves someone renting their location will only be allowed to have a term equal to the term of their current lease agreement. Borrowers who own their business location or will use the funds to obtain a business location may have terms up to 10 years in length. The duration of the loan’s term is subject to several other factors regarding their specific request.

 

TPRDC will require financial and personal information in order to complete a micro-loan application. A documentation checklist will be provided to a potential borrower tailored to fit their specific request. It is recommended to have a business plan for TPRDC to review.

 

You should expect the entire loan process from start to finish to take anywhere from 3-6 weeks. This assumes the borrower has provided all information requested by TPRDC in a timely manner.