Fountainhead Commercial Capital has created a program designed to allow banks and credit unions to outsource Small Business Administration 504 loans.
Fountainhead's FastTrack 504 program lets lenders participate in SBA loan programs without the need to set up their own special SBA department, according to a March 25 press release. SBA 504 loans are used for the purchase of fixed assets such as real estate at below-market rates.
"Many banks and credit unions scramble to find construction financing, interim loan financing, or otherwise reject a viable SBA 504 loan candidate," said Chris Hurn, Fountainhead CEO, in the release. "Our program changes the landscape of SBA 504 lending, making it easier for financial institutions to participate in a meaningful and profitable manner."
To participate in FastTrack, lenders sign up and hand off the prospective borrower to Fountainhead. The Orlando, Fla.-based company then handles the entire process of securing an SBA 504 loan, from underwriting the transaction to working with the SBA for approvals to closing and funding both the first-mortgage and interim second-mortgage portions.
When the SBA debenture funds out the interim second mortgage, Fountainhead will then remit loan premiums up to 8% of the funded first mortgage loan amount to the bank or credit union.
Fountainhead plans to offer the program initially in 12 states before expanding nationwide by early summer.
