Pub. 6 2018 Issue 3

Issue 3. 2018 19 efficiency in real estate markets such as this are very critical. By being more proactive with your customers and establishing efficient processes, this helps minimize pricing impacts and offsets some of the results of interest rate increas- es.” He recommends his clients start the process early and have their financial statements ready to go. “This helps save time and minimize the risk to any major inflation to interest rates.” And while many real estate customers may feel the need to do so, Hunt says there is no need to panic. “It’s a very normal cycle in business. As rates go up, it should put downward pressure on real estate values, either holding them steady, or possible causing them to decrease slightly.” From Peterson’s standpoint: “Activity in the local market has not slowed down. Most customers are experiencing the same up-tick in business, therefore they have more capital to account for the ris- ing interest rates.” But “if you have a client who is concerned about rising interest rates,” Peterson says, “you can ease their concerns by giving them a long term fixed rate today, and that is what the SBA 504 offers.” Evans, Hunt and Peterson say the new SBA 504 25 year fixed-rate loan is a great product that can help offset the total monthly payment that customers will pay, and is available for owner-oc- cupied commercial real estate customers who work with their bank and certified development companies. (A certified development company is certified by the Small Business Administration of the Federal government to help small businesses with 504 long term fixed rate financing to purchase owner occupied real estate.) Peterson explains that some customers are coming from a leasing situation, “so the total monthly amount becomes very important when considering loans and the properties they are looking to finance.” He recently had a client that completed an SBA 504 loan with MWSBF and said without the program, it would have been problematic for this client to leave his current leasing situation to pursue a purchase opportunity. Hunt adds that, “the SBA 504 program also now includes a refinance product that will allow a small business owner that already has a building to refinance the debt on that building. This could be a great option for a business owner who has a variable rate on their building debt and is watching the monthly payment increase as rates go up. They can use this program to lock in a fixed interest rate on their building debt before interest rates go any higher.” And though Evans notes MWSBF is Utah’s top SBA lender, and that the SBA 504 program is a good option for many small businesses, it’s not a magic bullet. “That’s why open and honest communi- cation is so important,” he says. “What’s financially best for the production loan officer is not always in the best interest of the customer. But by laying all the options on the table, and helping cus- tomers understand the pros and cons of the various programs available for their unique situation, you’re doing-right-by- the-customer, which really leads to a win-win.” n WORDS. DANI GORDEN Advertising Sales 855.747.4003 dani@thenewslinkgroup.com Sabrena Suite-Mangum is a writer and public relations consultant whose clientele in- cludes Mountain West Small Business Finance. She was named “Blogger of the Year” for the National Association of Development Companies (NADCO) in 2014