California Statewide CDC

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in December 2023 is:

Purchase/Construction

25-Year: 5.33%
20-Year: 5.30%
10-Year: 5.65%

Refinance

25-Year: 5.33%
20-Year: 5.30%
10-Year: 5.65%

10-year debenture funded in Nov 2023 (closing and rate offered every other month)

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market

Check out closed deals in October/November from Team Manucharyan

https://conta.cc/3sOvf8V

California Statewide CDC Success Story

For more than 60 years, the Sanchez family has honed their craft and trade in the iron works business. In the late 1950’s, Raul Sanchez’ father started to weld and when Raul turned 15, his father taught him how to weld. In. 1989, Raul opened S.R. Iron in San Diego, CA. He moved the business to Healdsburg, CA. By 2017, the business was growing and his two sons, Carlos and Ray, came on board as part owners.

While its location has changed several times, one thing that has remained the same is that the Sanchez family has provided its clients with a sense of community and trust by providing a superior finished product. Due to its rapid growth, the business now operates out of a 10,000 sq. ft. location as well as a 20,000 sq. ft. adjacent vacant lot that is used to store and prep materials for jobs.

The opportunity to buy the property was presented to the Sanchez’. They decided to seek a loan for the purchase as well as to make improvements on the property. Steve Roth at The NorCal Small Business Develop Center Network’s Finance Center introduced Al Thiel to the client, who packaged the loan file and structured the loan with a low-down payment. Al and Steve helped identify a third-party lender who was amiable to the project, Summit State Bank, who ended up being the perfect bank partner!

“The SR Iron real estate transaction was a complex and lengthy one in which a financing partner’s ability to work with the borrower and senior lender was critical to its success. California Statewide, as an institution, and Al Thiel, as an experienced senior SBA 504 lender, had the combination of knowledge and experience necessary to the successful completion of the transaction,” said Steve Roth, Lending Specialist, NorCal SBDC Finance Center. “The real estate acquisition set the stage for SR Iron to expand from a secure financial base. In addition, Al Thiel has been part of the NorCal SBDC Network’s webinar series which has helped inform and educate thousands of small business owners over the last three years.”

The client’s operating business benefited from the collaboration between California Statewide CDC and the Small Business Development Center. Ultimately, the applicant wound up with 90% real estate financing, which translated to a small down payment of 10 percent. Fixed rate financing with 25 year loan terms are still available today in this uncertain rate environment; the SBA 504 loan program was the perfect vehicle to help the Sanchez’ acquire the property.

The Small Business Administration 504 loan program provides for reasonable loan terms for small businesses seeking to occupy the property; the loan presented by the California Statewide team was too good to pass up and was ideal loan for the Sanchez’. The loan helped with the acquisition of the building and property improvements. Over the next two years will pave the way for the company to add 10 more employees to the 23 employees they already have.

For more information about a 504 Purchase and Construction Loan and/or a 504 Debt Refinance option, visit https://calstatewide.com/statewide-fast-504/

To learn more about SR Ironworks, Inc, please visit https://sriron.com/ or visit their Instagram page .r.iron.
“The SR Iron real estate transaction was a complex and lengthy one in which a financing partner’s ability to work with the borrower and senior lender was critical to its success. California Statewide, as an institution, and Al Thiel, as an experienced senior SBA 504 lender, had the combination of knowledge and experience necessary to the successful completion of the transaction."

Al Thiel
C: 916-600-2201
al.thiel@
calstatewide.com

The whole California Statewide team has been great to work with. We provide strategic property solutions for our clients and working with California Statewide CDC has made the process smoother. Their SBA loan knowledge is unsurpassed, they solve issues quickly and most importantly, they are very creative with ideas to make loan transactions work for our clients.”

Todd Holley, Senior Vice President and Partner, Voit Real Estate Services

The full-term effective fixed interest rate for SBA 504 loans closing in November 2023 is:

Purchase/Construction

25-Year: 7.01%
20-Year: 7.02%
10-Year: 7.21%

Refinance

25-Year: 7.04%
20-Year: 7.05%
10-Year: 7.24%

10-year debenture funded in sep 2023 (closing and rate offered every other month)

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team
Testimonial

504 Debt Refinance Just Got Easier!

SBA has made several notable 504 program Debt Refinance enhancements in revisions to SOP 50-10-7 effective November 13, 2023:

For Debt Refinance projects without Expansion, SBA has reduced the “substantially all” standard for project qualified debt from 85% to 75%. In other words, instead of the existing standard where 85% of the existing debt was used to acquire the Eligible Fixed Asset(s) and 15% or less was incurred for the benefit of the small business, the standard improves to 75%/25%. Note that the existing 85%/15% standard remains for Debt Financing withExpansion.

In addition, SBA has added new guidance permitting “Other Secured Debt” to be included as eligible for refinance if that debt has been secured by the Eligible Fixed Asset(s), sourced for at least 6 months prior to the date of application and the borrower is current on all payments for the last 6 months. Examples include working capital included in the original loan to be refinanced.

SBA has removed the requirement for written verification that the present 7(a) lender is unwilling or unable to modify existing 7(a) debt, including restrictions related to refinancing same institution debt. SBA now requires the CDC to notify the existing CDC or 7(a) lender in writing by letter or email no less than 10 business days to advise them the existing loan is being refinanced.

SBA increased the loan to value for projects that include financing of Eligible Business Expenses from 85% to 90% and eliminated the 20% cap on the amount of cash out for Eligible Business Expenses.

SBA restates a change that the agency had already made increasing the amount of existing debt that may be refinanced in a 504 debt refi with expansion project from not more than 50% to not more than 100% of the new expansion costs.

Did You Know?

The SBA loan programs were at risk of being halted during a shutdown of the federal government beginning 10/1. Fortunately, our politicians passed a 45-day temporary funding bill to keep the government lights on. In anticipation of a shutdown, we had many questions from our lending partners and clients about impacts.

Loan Approval

A shutdown of no more than a week or two would have minimal impact on the loan approval process. The CDC would continue to process all new loan requests/applications through internal CDC loan committee approval. The files would be ready to submit to SBA once they reopen the eTrans system. The SBA Loan Processing Center would have a backlog of loans to review and approve, and this would add some days to the SBA turn-time for achieving a loan authorization. However, the backlog would be cleared up quickly – within a few days. With a longer shutdown, one that exceeded 2 weeks, the backlog and turn-times would also grow larger and it would take the agency more days to catch-up. However, the CDC would continue to process new loan request business as usual.

Loan Closing/Funding

Possibly the larger concern for impacts are the delays that would cause an SBA loan closing/funding to be pushed to subsequent months. This can impact clients with additional bridge loan interest payments, and risk SBA loan rate changes. CDC Closing staff would prepare all files to be ready to close and fund at the earliest possible opportunity.

Loan Servicing

Requests for complex servicing actions like a loan subordination change or change to guarantor, etc., would be delayed until the SBA Servicing Center was back online. However, most payment related servicing actions (like loan payoffs) could be processed as these are handled by CDC staff and the Central Servicing Agent that SBA contracts with.

The full-term effective fixed interest rate for SBA 504 loans closing in October 2023 is:

Purchase/Construction

25-Year: 7.22%
20-Year: 7.27%
10-Year: 7.05%

Refinance

25-Year: 7.23%
20-Year: 7.29%
10-Year: 7.07%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

Testimonial

“I have been working with the California Statewide CDC team for over 12+ years, there is not a relationship I rely on more for my brokerage business. I trust California Statewide CDC with my best clients. They are consummate professionals, honest, reliable and the most knowledgeable group I have ever worked with.”

Mike Barreiro, Executive Vice President & Principal
Daum Commercial

The full-term effective fixed interest rate for SBA 504 loans closing in September 2023 is:

Purchase/Construction
25-Year: 6.81%
20-Year: 6.86%
10-Year: 7.05%

Refinance
25-Year: 6.83%
20-Year: 6.88%
10-Year: 7.07%

10-year debenture funded in sep 2023 (closing and rate offered every other month)

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

SBA implemented a new compliance check process for all delegated and non-delegated 504 and 7(a) loans submitted to the agency effective August 1, 2023. SBA’s technology platforms will validate Applicant data through third party databases to protect against fraud, identity theft, and ineligibility.

With this change, SBA removed the requirement for SBA lenders to complete a character determination for applicants related to criminal backgrounds. For applications submitted beginning August 1, 2023, lenders will rely on the applicant’s disclosures and acknowledgements as documented on the signed 1244 form.

This change reduces the workload and time for lenders to prepare the file to submit to SBA but adds a pre-processing step for SBA that can result in delays in loan approval. As is the case with all process changes, we expect some early kinks that will be worked out over time.

Regardless, we see this as an enhancement to the program as SBA is committed to softening the previous rather strict eligibility requirements related to applicant character determination. In addition, these changes eliminate the difficult position for SBA lenders having to address these sensitive issues with their clients.

The full-term effective fixed interest rate for SBA 504 loans closing in August 2023 is:

Purchase/Construction
25-Year: 6.55%
20-Year: 6.60%
10-Year: 7.06%

Refinance
25-Year: 6.57%
20-Year: 6.62%
10-Year: 7.08%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

Another great testimonial:

“The whole California Statewide team has been great to work with. We provide strategic property solutions for our clients and working with California Statewide has made the process smoother. Their SBA loan knowledge is unsurpassed, they solve issues quickly and most importantly, they are very creative with ideas to make loan transactions work for our clients.”

Todd Holley, Senior Vice President and Partner,
Voit Real Estate Services

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in July 2023 is:

Purchase/Construction

25-Year: 6.58%
20-Year: 6.63%
10-Year: 7.06%

Refinance

25-Year: 6.60%
20-Year: 6.65%
10-Year: 7.08%

10-year debenture funded in May 2023 (closing and rate offered every other month)

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

At California Statewide CDC, we work hard to make the loan process as quick and easy as possible. We know our efforts are working based on the positive feedback we get from our clients. Take a look:

“I can’t express enough how easy it was working with SBDC and California Statewide CDC. Representatives from both parties kept me apprised of all aspect of the loan process along the way and were there to alleviate any concerns I had. They were knowledgeable, responsive and made my life easier. If you’re a small business owner in need of a loan, I’d recommend California Statewide CDC any day of the week”

Navin Gupta, Owner of CMIT Solutions of Anaheim West

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in June 2023 is:

Purchase/Construction

25-Year: 6.33%
20-Year: 6.38%
10-Year: 6.04%

Refinance

25-Year: 6.35%
20-Year: 6.40%
10-Year: 6.06%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

Elimination of the Loan Authorization

SBA issued Procedural Notice 5000-846991 that amends SOP 50 10 6 to remove the requirement for loan authorization for both the 7(a) and 504 programs for all applications received by SBA on or after May 12, 2023.

The first step is to simply rename the authorization to “Terms and Conditions”; the structure and format of the document will otherwise not change. The next step is to simplify the Terms and Conditions document, which removes unnecessary sections that contain information redundant with other required loan-related documents; but will contain the information and formal SBA approval necessary to support the lending process.

CDCs recognize the importance of the SBA loan authorization as a formal milestone supporting our bank partner lending process, and to satisfy purchase agreement finance contingencies, and will work with NADCO to ensure the document continues to satisfy these needs.

Change to Affiliation Rules:

Affiliation based on Common Management, Identity of Interest, and Franchise Agreements are being eliminated. After May 11, 2023 business will not be found to be affiliated on related loans.

Business will continue to be found affiliated in the following circumstances:

When another business owns more than 50% of the applicant or the applicant owns more than 50% of another business.
Applicant owners that exceed 50% ownership and that owns more than 50% of another business in the same 3-digit NAICS sub sector.
When no owner exceeds 50% ownership of the applicant, any 20% or more owner that owns more than 50% of another business in the same 3-digit NAICS sub sector.

These changes have generated many questions that will be cleared up over the coming weeks with more guidance from SBA.

Did You Know?

Elimination of the Loan Authorization:
SBA issued Procedural Notice 5000-846991 that amends SOP 50 10 6 to remove the requirement for loan authorization for both the 7(a) and 504 programs for all applications received by SBA on or after May 12, 2023.

The first step is to simply rename the authorization to “Terms and Conditions”; the structure and format of the document will otherwise not change. The next step is to simplify the Terms and Conditions document, which removes unnecessary sections that contain information redundant with other required loan-related documents; but will contain the information and formal SBA approval necessary to support the lending process.

CDCs recognize the importance of the SBA loan authorization as a formal milestone supporting our bank partner lending process, and to satisfy purchase agreement finance contingencies. The CDC industry is working with SBA to ensure the document continues to satisfy these needs.

Change to Affiliation Rules:
Affiliation based on Common Management, Identity of Interest, and Franchise Agreements are being eliminated. After May 11, 2023 business will not be found to be affiliated on related loans.

Business will continue to be found affiliated in the following circumstances:

When another business owns more than 50% of the applicant or the applicant owns more than 50% of another business.
Applicant owners that exceed 50% ownership and that owns more than 50% of another business in the same 3-digit NAICS sub sector.
When no owner exceeds 50% ownership of the applicant, any 20% or more owner that owns more than 50% of another business in the same 3-digit NAICS sub sector.

These changes have generated many questions that will be cleared up over the coming weeks with more guidance from SBA.

The full-term effective fixed interest rate for SBA 504 loans closing in May 2023 is:

Purchase/Construction

25-Year: 6.04%
20-Year: 6.09%
10-Year: 6.06%

Refinance

25-Year: 6.04%
20-Year: 6.09%
10-Year: 6.06%

10-year debenture funded in May 2023 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

SBA Offers Unique Appraisal Benefit

The SBA offers a unique benefit to small businesses by allowing a 10% shortfall on appraisals before any restructuring is necessary. So, for example, if a client is under contract for $1,000,000 and the appraisal comes in at $900,000, the SBA would not require any restructuring, and the applicant would not need to provide additional cash.

This benefit can be a real lifesaver when the appraised value is lower than expected. While some may panic, this shortfall allowance allows for greater flexibility in appraisal approval and closing deals.

Ultimately, this benefit is a valuable tool for small businesses looking for financing options. It can give you the capital you need to grow and thrive while minimizing financial risk.

Check out this video about the appraisal process

California Statewide CDC - Appraisal The SBA offers a unique benefit to small businesses by allowing a 10% shortfall on appraisals before any restructuring is necessary. For example, if a client...

"As someone new to the SBA process I was both anxious to understand and leverage the opportunity most effectively. Working California Statewide CDC made that possible. They were incredibly clear, attentive and patient throughout the process, which in this case was complicated by a government shutdown. California Statewide CDC was masterful in securing the best deals from the various bank options, and tirelessly helpful as we navigated the process. If you want to get the most from your SBA loan, work with the team at California Statewide CDC - it's that simple."
Simon Mainwaring, Owner, We First, Inc.

Give us a call at 1-800-982-9192 with any SBA loan questions!

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in April 2023 is:
Purchase/Construction

25-Year: 5.88%
20-Year: 5.95%
10-Year: 6.77%
Refinance

25-Year: 5.90%
20-Year: 5.97%
10-Year: 6.79%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

SBA 504 Rate Update
Dear Bill

The full-term effective fixed interest rate for SBA 504 loans closing in March 2023 is:
Purchase/Construction

25-Year: 6.33%
20-Year: 6.33%
10-Year: 6.77%
Refinance

25-Year: 6.35%
20-Year: 6.35%
10-Year: 6.79%

10-year debenture funded in March 2023 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team
DID YOU KNOW?

We are excited to report that SBA 504 loan deal volume has been on the rise! While there was a temporary slowdown that started in November 2022 due to interest rate increases, things are now picking up again.

There are two key factors driving this increase in 504 deal volume. Firstly, people have adapted to the interest rate changes and have come to realize that they are still relatively low compared to historical averages. Secondly, there is less competition from investor buyers due to higher prices and a higher cost of capital.

As a result, small business owners are turning to SBA 504 loans as a reliable and cost-effective financing option to help them grow their businesses. These loans offer attractive rates and terms that are often unavailable through traditional financing sources.

At California Statewide CDC, we have helped countless small business owners secure SBA 504 loans and other financing solutions to help them achieve their goals. Our team of experts is always available to answer any questions you may have and guide you through the loan process.

If you are interested in learning more about SBA 504 loans and how they can help your business grow, please don't hesitate to contact us. We look forward to helping you achieve your business goals.

Thank you for your continued partnership and support.

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in March 2023 is:

Purchase/Construction

25-Year: 6.33%
20-Year: 6.33%
10-Year: 6.77%

Refinance

25-Year: 6.35%
20-Year: 6.35%
10-Year: 6.79%

10-year debenture funded in March 2023 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

The California Statewide CDC Market Team

Another great testimonials....

“We were in need of a refinancing loan on our building, but we were having a tough time getting financing for the full loan from my bank and looked for additional options. California Statewide CDC stepped in to help us get an SBA loan to fill the gap, essentially saving us a lot of heartache. Getting the loan was a breeze and the communication and transparency every step of the way was a welcomed relief. I enthusiastically recommend California Statewide CDC to small business owners who are seeking financial help.”
Matt Morrow, Owner, Morrow Surveying

The full-term effective fixed interest rate for SBA 504 loans closing in February 2023 is:

Purchase/Construction

25-Year: 6.01%
20-Year: 5.98%
10-Year: 6.43%

Refinance

25-Year: 6.03%
20-Year: 6.00%
10-Year: 6.45%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

In a sign that the economy may be cooling significantly, SBA 504 approval volume through November 2022, the first two months in FY2023, is down nationwide approximately 50%. At this time last year the national 504 program had $2.17B in loan approvals compared to $1.14B through November FY2023.

Certainly, rate increases have impacted the feasibility of some owner-user financing projects, and some borrowers are sitting out the higher interest rate period as the Fed attempts to cool inflation. However, the SBA 504 continues to be a fantastic option for small business owner-user project financing. The recent enhancements for 504 debt refinance programalso provide clients greater options for securing lower rates in the future.

We hope 2023 is a great one for all our lending partners and small business clients, even as the new fiscal year gets a slower start.

The full-term effective fixed interest rate for SBA 504 loans closing in January 2023 is:

Purchase/Construction

25-Year: 6.31%
20-Year: 6.29%
10-Year: 6.43%

Refinance

25-Year: 6.33%
20-Year: 6.30%
10-Year: 6.45%

10-year debenture funded in January 2023 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

The full-term effective fixed interest rate for SBA 504 loans closing in November 2022 is:

Purchase/Construction
25-Year: 6.53%
20-Year: 6.45%
10-Year: 6.53%

Refinance
25-Year: 6.55%
20-Year: 6.47%
10-Year: 6.55%

10-year debenture funded in November 2022 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

The full-term effective fixed interest rate for SBA 504 loans closing in October 2022 is:

Purchase/Construction
25-Year: 6.44%
20-Year: 6.36%
10-Year: 5.60%

Refinance
25-Year: 6.46%
20-Year: 6.38%
10-Year: 5.62%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

The full-term effective fixed interest rate for SBA 504 loans closing in September 2022 is:

Purchase/Construction
25-Year: 5.44%
20-Year: 5.34%
10-Year: 5.32%

Refinance
25-Year: 5.45%
20-Year: 5.35%
10-Year: 5.34%

10-year debenture funded in September 2022 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

Change to SBA Rules for Commercial Real Estate Appraisals

Effective July 29, 2022, the date of the formal notice from SBA, if the appraisal that CDCs must submit for approval to the SLPC is less than 90% of the estimated value of the commercial real estate, the debenture must be reduced or the CDC must secure additional collateral or additional investment from the Borrower and/or guarantors. The previous rule was to require adjustment when the appraisal was less than 95% of the estimated value.

If additional collateral or additional investment is not available, but the applicant demonstrates strong, consistent cash flow sufficient to support the debt, then the SLPC can approve the appraisal and the CDC may close the loan.

The full-term effective fixed interest rate for SBA 504 loans closing in August 2022 is:

Purchase/Construction
25-Year: 4.98%
20-Year: 4.89%
10-Year: 4.96%

Refinance
25-Year: 4.99%
20-Year: 4.90%
10-Year: 4.98%

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

The full-term effective fixed interest rate for SBA 504 loans closing in July 2022 is:

Purchase/Construction
25-Year: 5.11%
20-Year: 5.05%
10-Year: 4.96%

Refinance
25-Year: 5.12%
20-Year: 5.06%
10-Year: 4.98%

10-year debenture funded in July 2022 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

SBA 504 Rate Update

The full-term effective fixed interest rate for SBA 504 loans closing in July 2022 is:

Purchase/Construction
25-Year: 5.11%
20-Year: 5.05%
10-Year: 4.96%

Refinance
25-Year: 5.12%
20-Year: 5.06%
10-Year: 4.98%

10-year debenture funded in July 2022 (closing and rate offered every other month).

Please contact a California Statewide CDC market representative to assist you with your SBA 504 needs!

Best Regards,

The California Statewide CDC Market Team

Rising Rates Mean SBA 7(a) Loan Payment Impacts for Many

Rising interest rates are impacting SBA 7(a) borrowers with significant increases to their monthly payments

The Fed has already raised rates by 75 bps this year and has announced another 50 bps increase for June. Rates are expected to increase 200 bps in 2022. That equates to a payment increase of $20,000 per year per $1 million in loan amount.

SBA 504 Debt Refinance to the Rescue
The SBA changed their guidelines last year to allow SBA-to-SBA refinancing. This provides variable-rate SBA 7(a) borrowers with the opportunity to move to a long-term, fixed-rate SBA 504 loan.

Borrowers can also refinance an existing SBA 504 into a lower-cost 504 loan.

Key Highlights:
Eligibility requires a “substantial financial benefit” of at least 10% over the existing debt service at the time of loan approval.

The SBA 504 debt refinance rules allows up to 20% cash out for eligible business expense.

Financing up to 90% LTV for straight debt refinancing, and 85% LTV if cash out.

Partner with California Statewide CDC
We are a Premier Certified Development Company with decades of experience processing SBA 504 loans quickly, efficiently and with high-touch service.

Please contact one of our loan experts below if you have any questions, or require assistance.

Sincerely,

The California Statewide CDC Team

Enhancements to the Community Advantage 7(a) Pilot Program

In a move to encourage increased lending in historically underserved markets, SBA released a notice and request for comments in the Federal Register for a list of reforms to the Community Advantage (CA) Pilot Program. The following changes go into effect on May 31, 2022 and are subject to refinement after the comment period:

Reopens the program for new lenders to apply for lending authority

Extends the pilot program through September 30, 2024

Increases the maximum loan amount from $250,000 to $350,000

Delegates credit approval authority for qualified lenders

Uses qualified scoring models for credit worthiness assessment

Removes some eligibility restrictions based on applicant criminal record

Increases to the maximum lender fees

Increases to the maximum allowed interest rate

Simplifies hazard insurance requirements

Simplifies changes to collateral requirements
Simplifies affiliation rules

Once these final rules are released, California Statewide CDC, like all CA program lenders, will begin work to adopt all required and beneficial changes to their own internal CA lending business.