Fillable Printable Eligibility Information Required For 504 Submission

Eligibility Information Required For 504 Submission

SBA Form 2450 (09-16) Previous Editions Obsolete Page 1 of 6

ELIGIBILITY INFORMATION REQUIRED

FOR 504 SUBMISSION (NON PCLP)

OMB APPROVAL NO.: 3245-0071

EXPIRATION DATE: 12/31/2019

The CDC completes this form to help SBA carryout its lender, portfolio and program oversight as part of the

application package for Section 504 Loan and sends to: Sacramento Loan Processing Center, Small Business

Administration, 6501 Sylvan Road, Suite 111, Citrus Heights, CA. 95610-5017.

I. General Information - Fill out all blanks and answer all questions. If a question is answered "No," the loan is not eligible.

Applicant Name:

CDC Na me :

Applicant is an operating business organized for profit, is located in United States, has demonstrated a need for

the desired credit, and the desired cred it is not otherwise available on reasonable terms from non-Federal sources.

YES___ NO___

The products and/or services of the applicant business are available to the general public.

YES___ NO___

II. Size and Affiliation - Check Any Item(s) That Are Applicable and if checked answer the questions.

___Applicant has possible affiliates. If item is checked, provide the following information in Exhibit 1 of Form 1244:

List possible Affiliates, discuss possible bases of affiliation and determine if affiliation exists.

If affiliation exists, provide a schedule showing combined size calculation.

YES___ NO___

___Applicant business meets the size standards.

The combin e d siz e calculation of Applican t and its Affilia te s (if any) meets the size sta ndard for the

Applicant’s primary industry; or the siz e standard for the primary industry of the Applicant and its

Affiliates, whichever is higher.

YES___ NO___

i. If using the 504 size standard:

• Tangibl e ne t worth of Applicant (excluding its Affiliates)

• Average net income after Federal income taxes (excluding any

carry over losses) for the Applicant (exc l uding its Affiliates) for

the preceding two completed fiscal years

ii. I f using the alternative 7(a) size standard:

• Primary industry of Applicant

• NAICS Code of applicant

• Averag e an nu al re cei pts of applicant busine ss (excluding affilia tes)

over last 3 completed fiscal years

• Number of employees of applicant business

• SB A size st andard for Applicant

___The size standard is exceed ed by no more than 25%.

Applicant agrees to use the assistance within a labor surplus area.

YES___ NO___

___Applicant business is or will be operating under a franchise/license/dealer/jobber or similar agreement.

If checked, CDC must:

(a) Provide with the application a copy of the agreement and the SBA Form 2462,“Addendum

Franchise Agreement,” o r alternative SBA-approved document, along with any related documents

the franchisor requires the franchisee to sign to the Sacramento Loan Processing Center (SLPC), and

YES___ NO___

(b) If the SBA Form 246 2 submitted with the application is not executed, submit to SLPC

prior to c losing the executed SBA Form 2462, “Addendum to Franchise Agr eeme nt,” or alternative

SBA-approved document.

YES___ NO___

III. Business Rev enue

Applicant does not earn 1/3 or more of its gross annual revenue from packaging SBA loan s .

YES___ NO___

IV. Proj ect Financing – Answer All Questions. If a question is ans wered “No,” the loan is not eligible.

The Interim Loan does not cover the Borrower’s contribution. The source of interim financing is not from any SBA

Program, directly or indi rectl y; the term s an d c onditions of the f i n anci n g are acce pta ble; t h e source is not t he Applicant

or an A ss ociate of th e Applicant; an d th e sou r ce h as th e ex pe ri en ce an d qual if i cat i ons t o monitor properly all Project

construction and progress payments.

YES___ NO___

SBA Form 2450 (09-16) Previous Editions Obsolete Page 2 of 6

The Borrower contribution is cash or property that is part of the Project Property and is not derived from an SBA

Business L oan Progr am. If the cont ri bu tion is b or rowed, the interest rate is reasonable an d an y li en on t h e Pro ject

assets is subordinate to the liens securing the 504 loan, and the loan will not be repaid at a faster rate than the 504 loan.

YES___ NO___

The Thir d Party Loan is at le ast as much as th e 504 L oan (net proceeds ). The Thi rd Party Loan(s) has a t e rm of at least

7 years f or a 1 0-year debenture an d at l east 10 years fo r a 2 0-year debentu re. The in te res t rat e is reasonable. A ny

Financing provided by the seller of Project Property is subordinate to the 504 loan and may not be prepaid without

SBA consent.

YES___ NO___

No m ore than 50% of eligi bl e Project c osts are from Federal so u r ces.

YES___ NO___

V. Use of Project Proceeds – Check Any Item(s) That Are Applicable.

___ To reloca te any operations of a small business which will cause a net reduction of one-third or more in the

wor kforce of the relocating small business or a substantial increase in unemplo yment in any area of the country.

If item is checke d, answer t he fol l ow ing questions . If “No,” loan is not eligible.

The relocation is key for economic reasons and crucial to the continued existence, economic wellbeing,

and/or competitiveness of the applicant; and the economic development benefits to the applicant and the

recei ving community outweigh the negat ive impact on the community fro m which the applicant is moving.

YES___ NO___

___To provide or refinance funds used for payments, di stributions, or loans to Associates of the Applicant.

If item is checked, loan is not eligible.

___To acquire, construct, or modify buildings and improvement s , and/or to purchase and insta ll machinery and

Equipment located on land leased to the Applica nt by the CDC or an unrelated lessor. If item is chec ked, answer

th e followin g questions. If “No,” loan is not eligible.

The remaining term of the lease, including options to renew, exercisable solely by the lessee, will equal or

exceed the term of the debenture, or, in the case of machinery or equipment, equal s or exceeds the useful

life of the property or the term of the debenture, whichever is less.

YES___ NO___

The Applicant will assign its interest in the lease to the CDC with right of reassignment to SBA.

YES___ NO___

If CDC is leasing property to the Applicant, the rent paid during the debenture term will pay principal and

interest on all debt incurred by the CDC to finance the Project, and all related expenses.

YES___ NO___

___Deb t refinance as part of an expansi on is included in Project cos t s : If checked, a ns wer th e f ollowin g questi ons.

If “No, ” loan is not eligible.

Total debt refi nanced is no more than 50% o f new expa ns ion costs;

YES___ NO___

Either:

1. Sub sta nt ia l ly all (85% or more) of the proceeds of the existing debt was used to acquire land, including

a build ing situated thereon, to construct a building t hereon, or purchase eq uipment and the remaining

amount (15% or less) was incurr ed for the benefit of the small business seeki ng the refinancing; or

YES___ NO___

2. If the land, building, or equipment was or iginally financed through a commerci al loan (hereafter the

“or iginal loan”) that was subsequently refina nced one or more times:

i. Substantially all (85% or more) of the proceeds of the original loan was used to acquire

land, including a building situated thereon, to construct a building thereon, or purchase

equipment and the remaining amount (15% or less) was inc urred for the bene fi t of the small

business seeking the refi nanc ing; and

YES___ NO___

ii. The existing debt is the m ost recent refin ancin g of th e ori gin al loan;

YES___ NO___

iii. The existing indebtedness is collateralized by fixed assets;

YES___ NO___

iv. The exi sting indebtedness was incurred for the benefit of the small business concern;

YES___ NO___

SBA Form 2450 (09-16) Previous Editions Obsolete Page 3 of 6

v. Project pro ce eds will be used only for refinancing exist ing indebtednes s or costs relating to the

project financed;

YES___ NO___

vi. The financing will provide a subs tantial benefit to the borrower when prepa yment penalties ,

financing fees, and other financi ng costs are accounted for;

YES___ NO___

vii. The Applicant has been current on all payments due on the existing debt for not less than 1

year prior to the d ate of application for refinancing;

YES___ NO___

viii. The financing under section 504 will provide better terms or rate of interest than the existing

indebted ness at the time of refinancing;

YES___ NO___

ix. No debt refinanced is due to an Associate of Applicant;

YES___ NO___

x. No debt re fi nanc ed is due to a Small Business Invest ment C ompany;

YES___ NO___

xi. No creditor whose debt is refinanced is in a position to sustain a loss causing a shift of any part

of a potential loss to SBA.

YES___ NO___

___Debt refinance w ithout exp ans ion is included in Project costs: If checked, answer the following questions.

If “No,” loan is not eligible.

i. The Refinancing Project doe s not involve the expansion of a small busi ness;

YES___ NO___

ii. The applicant has been in operation for all of the 2 year period ending on the date of

application;

YES___ NO___

iii. The Qualified Debt to be refinanced is a commercial loan:

a) 100% of which was for the benefit of the applicant;

YES___ NO___

b) That was incurred not less than two years before the date of the application;

YES___ NO___

c) T hat is not subject to a guaranty by a Federal agency or department;

YES___ NO___

d) That is secured by 504 Eligib le Fixed Assets;

YES___ NO___

e) Tha t is not a Third Party Loan on an e xi sting 504 project ;

YES___ NO___

f) For which the a ppl i can t has bee n curr ent on all p ayment s due for not less than one year

prior to the da te of applicatio n (as defined in 13 CFR § 120.882(g));

YES___ NO___

g) Either:

(1) Substantially all (85% or more) of the proceeds of the existing debt was used to

acquire an Eligible Fixed A sset(s) and t he remaining amount (15% or less) was

incurr ed for the benefi t of the small b us iness seeking refinancing; or

YES___ NO___

(2) If the Eligib le Fi xed Asset(s) was originally financed through a commercial loan

(hereafter the “original loan”) that was subsequently refinanced one or more

times; (A) substantiall y all ( 85% or more) of the pr oceeds of the original loa n was

used to acquire an Eligible Fixed Asset(s) and the remaining amount (15% or

less) was incurre d for the benefit of the small business se eking the refinancing;

and (B) the existing debt is the most recent refinancin g of the or iginal loa n;

YES___ NO___

iv. Thi s questio n applies only if the or igina l loan was for the construction of a new buil ding, or

the acquisition, renovati on, or r econs truct i on of an exi s t ing buildin g, and such loan would not

have satisfied the leasing policies set forth in 13 CFR §§ 120.131 and 120.870(b): Borrower is

able to demonstrate compliance with 13 CFR 120.131(b) for existing buildings as of the date

of application for assista nce;

YES___ NO___ N/A___

SBA Form 2450 (09-16) Previous Editions Obsolete Page 4 of 6

v. If there is a deficiency remaining on the loan to be refinanced, has it been addressed by one

or more of the three methods below (check all that apply):

YES___ NO___

___(a) Forgiveness of all or part of the deficiency

___(b) Acceptance of payme nt by the borrower

___(c) Requiring the borrower to execute a no te for the balance or any portion of the balance.

Thi s note must b e subordinate to the 504 if secured by any of the same collateral.

vi. If t he Refinancing Project incl udes financing for business expenses, the expenses are eligible

for financing and are included in a detailed and itemized list in the Credit Memorandum;

YES___ NO___

vii. The funding for the Refinancing Projec t includes an amount fro m the Third Party Lender equal

to or gre ater than the 504 net de benture amount , not less than 10% from the Borrower;

YES___ NO___

viii. The Third Party Lende r will have a first lien position an d the 504 loan will have a seco nd

lien position on all Eligible Fixed Assets securing the Refinancing Project;

YES___ NO___

ix. The refinancing meets the job creation, retention, or other economic development objectives

outlined in 13 CFR §§ 120.861 or 120.862 and SOP 50 10 5;

YES___ NO___

x. The Refinancing Project costs only include the amount used to refinance the Qualified Debt,

any Eli gible Business Expenses, and other costs under 13 CFR §§ 120.882(c) and (d) and

eligible administrative costs under 13 CFR § 120.833;

YES___ NO___

xi. No debt being refinanced is due to an Associate of the Applicant;

YES___ NO___

xii. No debt being refinanced is due to a Small Business Investment Company or a New Markets

Venture Capital Company; and

xiii. No cred itor whose debt is refinanced is i n a position to s ustain a loss causi ng a shift of a ny

part of a potential loss to the SBA.

YES___ NO___

VI. Conflict of Interest

SBA may not provide financial assistance to an applicant where there is any appearance of a conflict of interest

on the part of SBA or the CDC.

A) All statements must be answered as “True” to be eligible.

• If the applicant’s sole propr ietor, partner, officer, director, or stockholder with a 10% or more

interest, or a household member is a GS-13 or higher government employee or a Major or

Lieutenant Commander or higher in the military, the s mall business applicant has s ubmitted to

the CDC a statement of no objection by the pert inent government department or military service.

True___ False___

• No CDC or Associate** of CDC has a real or apparent conflict of interest with Applicant, any of

Applicant’s Associates, or any of the close relatives of Applicant’s Associates.

True___ False___

• No CDC or Associate o r close r elative of an Associate of the CDC has a di r ect or indir ect

financial or other interest in the Applicant, or has had such an interest within 6 months prior to

the dat e of the application.

True___ False___

• No Associ ate o f a CDC is incarcerated, on parole, or on probation or i s a co nvicted felon or has

an adverse final civil judgment (in a case invol ving fraud, breach o f tr ust, or o t her co nduct) that

wou ld c a us e the pub l i c to q u e st i o n the CD C ’ s b u si n e ss i nt e grit y.

True___ False___

• No CDC or any As sociate of CDC has accepted funding from a source that restricts, prioritizes,

or conditions the typ es of small business that CDC may assist under a n SBA program or that

imposes any conditions or requirements upon recipients of SB A assistance inconsistent with

SBA’s loan programs or regul at ions.

True___ False___

• None of the loan proceeds will directly or indirectly finance the purchase of real estate, personal

property or services from CDC or an Associate of CDC.

True___ False___

SBA Form 2450 (09-16) Previous Editions Obsolete Page 5 of 6

• Neither the Applicant, an Associate of Applicant, clo se relative, nor household member of an

Associ ate of Applica nt i s requ ired to i nves t in CD C.

True___ False___

• None of the proce ed s of the lo an will be used to acq uire spa ce i n project for which CD C has

issued a real estate forward co m mitment.

True___ False___

B) Check any item(s) that are applicable. If checked, SBA Standards of Conduct Committee approval will be

required prior to issuance of an SBA loan authorization.

___ SBA employee, the employee’s close relative or a member of the employee’s household is an employee, officer, director,

attorney, agent, creditor, or debtor, or has a financial interest in the App lic ant.

___ Former SBA employee separated from SBA for less than one year is an employee, officer, director, attorney, agent,

creditor or debtor, or has a financial interest in the Applicant.

___ Member of Congress or an appointed official or employee of the legislative or judicial branch (or a close relative or

household member of such an individual) is a sole proprietor, general partner, officer, director, em ploy ee, attorney, ag ent,

creditor or debtor, or has a financial interest in the Applicant.

___ Member or employee of a Small Business Advisory Council or a SCORE volunteer (or a close relative or household

member of such an individual) is a sole proprietor, general partner, officer, director, e mployee, a ttorney, agent, cr editor,

or debtor, or has 10.0% or more financial interest in the Applicant.

___ Employee of community organizations such as a certified development companies or microlenders (or a close relative

or household member of such an individual) has a financial interest in the Applicant.

(**Associate of a CDC is an officer, director, key employee, or holder of 20 percent or more of the value of the CDC’s stock or debt

instruments or an agent involved in the loan process. An Associate of a small business is an officer, director, owner of more than 20

percent of the equity, or key employee.)

VII. Other - Check Any Item(s) That Are Applicable. If checked, answe r the question.

___ Loan pro ce eds will affect properties included or eligible to be included in the National Register

of Historic Places .

YES___ NO___

___ Applicant or Affiliate(s ) has/have existing SBA loan(s)

The exist i ng SBA loan(s) is/are curre nt and a schedule is included in Exhibit 1 of Form 1244

YES___ NO___

(If “No, ” l oan is not eligible.)

___ Applicant or Associate(s) provided ans wers to questions 2 and/or 3 in Section XIX of SBA Form 1244 which

require a ba ckground chec k and a character determination in accordance with SBA Loan Progra m Requirements

(as defined in 13 CFR § 120.10). If checked, answer the following question. If “No,” loan is not eligible.

CDC received Agency clearance of character determination in writi ng and has maintained

appropriate documentation in loan file.

YES___NO___

___ Business or any of its principals has been involved in a Federal loan or Federally assis ted financing that

Defaul t ed and caused a loss to the Federal government or any of its depart ments or agencies.

(If chec ke d, explain in Exhibit 1 of Form 1244)

___ Applicant business is principally engaged in teaching, instructing, counseling, or indoctrinating religion

or religious beliefs whether in a religious or secular settin g. (If checked, explain in Exhibit 1 of Form1244)

SBA Form 2450 (09-16) Previous Editions Obsolete Page 6 of 6

___ Applicant has products or services of a prurient sexual nature. If checked, explain in Exhibi t 1 of Form 1244

and answer the following questions. If “No,” loan is not eligible.

Applicant does not present live performances of a prurient sexual nature.

YES___ NO___

Applicant does not derive more than 5% of its gross revenue directly or indirectly, through the sale of

products or services or the presentation of any depictions or displays of a prurient sexual nature.

YES___ NO___

___ Applicant conducts operations both in the United States and in a foreign country. If checked, answer the

following questions. If “No,” loan is not eligible .

Applicant operates primarily in the United Sta tes.

YES___ NO___

NOTE: According to the Paperwork Reduction Act, you are not required to respond to this collection of information unless it displays a

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data needed, and completing and reviewing the form is 6 minutes. Comments or questions on the burden estimates should be sent to U.S.

Small Business Administration, Chief, AIB, 409 3rd St., SW, Washington DC 20416. PLEASE DO NOT SEND FORMS

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ADDRESS.