The Truth Behind the SBA's Record-breaking Numbers: One Lending Program Flourishes While the Other Flounders

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The U.S. Small Business Administration's (SBA) 504 loan program has grown tremendously over the past five years, whereas its 7(a) loan program has been steadily decreasing in dollar volume. The 7(a) loan has played a large part in giving the SBA its problematic reputation, but the growth of the advantageous 504 loan is turning that reputation around.

The marketplace is starting to understand what the best-kept secret at the SBA is

The U.S. Small Business Administration's (SBA) 504 loan program has grown tremendously over the past five years, whereas its 7(a) loan program has been steadily decreasing in dollar volume. The 7(a) loan has played a large part in giving the SBA its problematic reputation, but the growth of the advantageous 504 loan is turning that reputation around.

Over the past three fiscal years, the number of SBA 504 loans has increased 15.44%, while the number of 7(a) loans has only gone up only 3.8%. In terms of dollar volume, the 504 loan has increased 23.6% in that same time period, while the 7(a) has actually decreased 6.2%. The 7(a) program is down over $900 million, whereas the 504 program is up nearly $1.3 billion according to statistics released late last year by the U.S. Small Business Administration.

Mercantile Commercial Capital, a company specializing in SBA 504 loans for small business owners, celebrates the growth of their core financial product. Mercantile was the first-ever financial institution to focus exclusively on providing SBA 504 loans to owners of small and mid-sized businesses. In the past five years, their help has grown the 504 program nearly 100%. Chris Hurn, the president, CEO, and cofounder of Mercantile is eager to educate clients on the benefits of the 504 loan. Hurn is not surprised at the 504's surge in popularity, especially in comparison to the 7(a), but realizes that others may not be aware of it.

"This is what happens when you don't just look at the numbers, but actually dig into the data." Hurn stated.

Hurn has developed his commercial lending firm, Mercantile Commercial Capital, into an Inc. 500 powerhouse as one of the nation's leading commercial lenders. Mercantile is one of only a select few companies that help small businesses reap the benefits from U.S. Small Business Administration (SBA) 504 loans, allowing his firm's clients to receive the highest cash-on-cash return for their commercial property investments.

"The marketplace is starting to understand what the best-kept secret at the SBA is," Hurn said, "and I would predict fewer and fewer real estate-only 7(a)'s in the future."

Mercantile's growth over the past year has been phenomenal: they created the ACE correspondent program, and now have 30 correspondent offices around the country. Also, last year the firm closed on 48 commercial loans on projects that totaled over $102 million. Their commercial loan volume is up more than 23 percent over 2006. In the past 48 months, Mercantile has funded over $287 million in projects for 174 business owners. Additionally, Hurn estimates that Mercantile Commercial Capital's below-market fixed interest rates and 90% loan-to-cost financing have saved the firm's clients some $38 million in capital expenses since 2003.

For more information about Mercantile Commercial Capital visit: http://www.504Experts.com.

About Mercantile Commercial Capital:

From their start in 2003, Mercantile Commercial Capital has made it their specialty to fund 504 loans for small business owners wanting to purchase or acquire commercial property. Mercantile Commercial Capital was recently named to the 2007 Inc. 500 list as well as "Best Place to Work" by the Orlando Business Journal in 2005, 2006, and 2007. They've also been named "Banker of the Year" by the National Association of Development Companies (NADCO), and the 2006 Small Business Administration (SBA) "Financial Services Champion of the Year" for Florida and the twelve-state Southeast District. They have been called the "Fastest growing commercial lender in America," the "Most unique and entrepreneurial bankers around," and the "Fun Bankers."

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