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The Evergreen Edge Newsletter
Featured Loan
Kitsap Lake Storage stabilizes with 504 refi
| Business Names / Operating Companies: | Kitsap Lake Storage, LLC |
| Industry: | Mini-warehouse & Self-Storage |
| Project Location: | 6400 Kitsap Way Bremerton, Wash. |
| Financing Purpose: | Refinance debt |
| Financing Structure: | 50% Lender/36% Evergreen/14% Borrower |
| Permanent Lending Partner: | Kitsap Bank |
| Economic Development Goals Met: | Community Development Goal of improving, diversifying or stabilizing the economy of the locality |
| Jobs Created and Retained: | 2 |
| Website: |
Kitsap Lake Storage, LLC was formed in 2005 to build and operate a self-storage facility located in Bremerton, Washington. The business is owned and operated by Chuck and Patty Bair along with operations manager LeAnn Williams. It consists of 95,000 gross square feet of mini storage units in six separate buildings with an additional 9,000 square feet of space available for RV, boat and auto parking. Despite the struggling economy, this business has been able to grow steadily since operations began.
"We heard about the SBA 7a and 504 loans through a trade magazine, Inside Self-Storage. I tore out the article," recalled Chuck Bair. "I wanted to be proactive and use the SBA program when the time was right. I was drawn to the 504 program by the possibility of a 90% LTV. The twenty year fixed rate was also appealing. We were anticipating a 504 rate between 5.5% and 6.5%. Never in our wildest dreams did we expect a rate under 5%."
The purpose of this loan was to refinance existing debt on the existing self-storage facility. The existing debt, over two years old, was used to acquire the land and construct the property improvements. The debt was not government-guaranteed and all payments were current for the previous twelve months. It met all of the requirements for eligibility under the debt refinancing provision of the Jobs Act of 2010.
This refinance allowed the borrower to stabilize debt service during this favorable rate climate and meet the terms of the existing loan, which was scheduled to mature in 2013. Chuck explained its benefits, "The SBA 504 program helped create a few jobs and solidify our business. Forecasts are hard to make these days. The fixed rate took the uncertainty out of our debt service. I can't say enough about how important this is during this current time of deep uncertainty."
Kitsap Lake Storage's experience was a positive one, "Working with Wendy Avila at Evergreen was phenomenal. She is a good communicator and knows her program. I have already recommended the 504 program to half-a-dozen of my business friends. I've also recommended Kitsap Bank and their SBA department. They know what they are doing."
Latest Loan Approvals and Funding
December approvals and January funding
Posted on Jan. 24 2012 10:49 am
We share some of our recent loan production details to recognize our lending partners, show the diverse businesses the 504 program can assist and celebrate the jobs being created.
December 2011 Approvals
| Lender | Business | Location | Project | Jobs |
| Alaska USA FCU | Midwife | Wasilla, AK | $473,600 | 3 |
| Banner Bank | Auto Parts | Yakima, WA | $389,018 | 4 |
| Citizens Bank | Martial Arts School | Corvallis, OR | $693,921 | 2 |
| Columbia Bank | Vacuum Chambers | Port Townsend, WA | $530,000 | 19 |
| Foundation Bank | Metal Coating & Engraving | Everett, WA | $4,350,000 | 6 |
| KeyBank | Veterinary Dermatology | Beaverton, OR | $1,970,731 | 0 |
| Umpqua Bank | Laundry & Drycleaner | Beaverton, OR | $627,950 | 0 |
| Umpqua Bank | Insect Control | Bend, OR | $461,700 | 2 |
| West Coast Bank | Plumbing, Heating, AC | Eugene, OR | $2,650,000 | 18 |
| Zions First National | Medical Supplies | Portland, OR | $715,000 | 6 |
| Totals | 10 loans approved | $12,861,920 | 60 |
January 2012 Funding
| Lender | Business | Location | Project | Jobs |
| Alaska USA FSU | Full Service Restaurant | Anchorage, AK | $2,175,750 | 60 |
| Chase | Freight and Logistics | Blaine, WA | $1,884,577 | 4 |
| Columbia Credit Union | Rebuild Palletizers Equipment | Washougal, WA | $753,700 | 0 |
| Inland Northwest Bank | Law Firm | Spokane, WA | $255,050 | 3 |
| KeyBank | Auto Body Paint and Repair | McKenna, WA | $2,370,000 | 0 |
| Kitsap Bank | Limited Service Restaurant | Shelton, WA | $900,000 | 6 |
| Kitsap Bank | Self-Storage | Bremerton, WA | $7,862,200 | 2 |
| Northrim Bank | Limited Service Restaurant | Anchorage, AK | $564,280 | 12 |
| Zions First National Bank | Child Care | Gresham, OR | $1,167,271 | 10 |
| Totals | 9 loans funded | $17,932,828 | 97 |
The 504 Corner
2011 Partnership Awards
Posted on Jan. 30 2012 10:14 am
In fiscal year 2011, Evergreen Business Capital produced the most SBA 504 loans of any Certified Development Company in the Northwest. We celebrate our best private lenders with our 2011 Partnership Awards:
- Northwest National Lending Institution
Key Bank - Northwest Community Lending Institution
Alaska USA Federal Credit Union - Northwest National Lending Officer
Dolores Harold, Key Bank - Northwest Community Lending Officer
Robert Warthen, Alaska USA Federal Credit Union - Alaska Community Lending Institutions
Alaska USA Federal Credit Union & First National Bank Alaska - Oregon Community Lending Institution
West Coast Bank - Washington Community Lending Institution
Washington Trust Bank
We look forward to working with more lenders, providing the long-term, low fixed rate solution to more businesses, and creating more jobs in 2012!
Q & A: The Finer Points of the 504
How are affiliates related to business size requirements?
Business loan applicants and their affiliates must be "small" under SBA size requirements. Affiliates are entities in which a principal owns a controlling interest. They are found in Schedule C or E of the personal tax returns and their separate tax returns list percent of ownership. Together they must have must have a tangible net worth of $15 million or less and an average net income after Federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years of $5 million or less.
A determination of whether or not the entity should Guarantee the loan is also made. We look at affiliates to also determine whether losses might negatively affect the financial strength of our borrower.
Inside Evergreen
Management Promotions
Posted on Jan. 30 2012 10:20 am
Annie Lant-Smith has been promoted to Vice President and Chief Credit Administrator.
Gregg Swanson is now a Vice President and Loan Production Manager.
We congratulate them both and thank them for all they do for the Evergreen Team.
Employee Spotlight
Justin Carlucci
Vice President
Senior Loan Officer
800.878.6613 x 426
206.577.1426
13925 Interurban Avenue South, Suite 100
Seattle, WA 98168
Region Serviced
Northwest Washington
Counties in Washington: north King, Island, San Juan, Skagit, Snohomish and Whatcom
Employee Spotlight:
Justin was born and raised in New Hampshire before attending undergraduate and graduate school in New York. While there, he received his law degree and MBA in finance. During school he worked in commercial real estate lending at GE Capital Real Estate in Bellevue, WA and took a full-time job in this area once he graduated. Justin has commercial real estate work experience in development, lending and brokerage, and has also worked within entrepreneurship organizations helping businesses of all sizes establish themselves and grow.
His decision to join Evergreen Business Capital was due to Evergreen's vision to stimulate the economy through job creation and provide their clients with secure, stable lending options that can help them grow.
Justin's hobbies include water skiing, golf, soccer, traveling and spending time with close friends.
| Attachment | Size | |
| Rural Loan Quick Reference Guide 020112 Carlucci.pdf | 108.72 KB | |
| Evergreen SBA 504 Rates 0512 Carlucci.pdf | 110.04 KB |
In Other News
A Small, Flexible Solution for Rural Business Financing
Posted on Jan. 30 2012 10:23 am
Evergreen's Rural Loan Program uses funds provided by the U.S. Department of Agriculture to offer the best benefits of familiar Small Business Administration loan programs in one small, flexible package for businesses. The program is available to businesses located areas with a population of 25,000 or less in the following Washington state counties: Clallam, Clark, Cowlitz, Grays Harbor, Jefferson, King, Kitsap, Kittitas, Klickitat, Mason, Pierce, Skagit, Skamania, Thurston and Yakima.
Like the SBA 504 program, it offers a low-down-payment, long-term, low-fixed-rate financing solution to borrowers. Lenders can reduce their risk by partnering with Evergreen to offer a 504 look-a-like, two loan financing structure. In addition, like the SBA 7(a) program, it provides a more flexible use of funds not only for real estate and equipment, but for inventory, working capital and refinancing existing debt. Evergreen can lend without a partner for businesses with more equity to contribute.
The Rural Loan Program can also be a sole source lender for loans to businesses that cannot obtain bank financing. Examples include real estate, equipment, working capital (collateralized by hard assets) and inventory loans.
Types of eligible recipients are broader than the SBA programs you already know. They must be individuals, public or private companies/organizations who are unable to finance the proposed project from its own resources or through commercial credit or other Federal, State, or local programs at reasonable rates and terms. This might include some non-profits that have revenue from sales or fees to support the operation and repay the loan.
Potential borrowers will be analyzed according to the "Five Cs of Credit": character (integrity), capacity (sufficient cash flow to service the obligation), capital (net worth), collateral (assets to secure the debt), and conditions (of the borrower and the overall economy).
Loans must be for community development projects, the establishment of new businesses, expansion of existing businesses, creation of employment opportunities, or saving existing jobs.
Use of funds:
-
Working capital
- Inventory
- Furniture, fixtures and equipment (FF&E)
- Leasehold improvements
- Buildings
- Debt refinancing
An Evergreen Rural loan from the USDA Intermediary Relending Program (IRP) fund can range from $10,000 to $250,000. The fund generally provides 35-50% of the total project costs, with the remainder funded by a lender or the business. The USDA regulations will not allow loan requests to exceed $250,000 or 75% of the total project costs.
One of the factors driving the need for the program is the lack of small business loans to both new and existing businesses, particularly in the range of $10,000 to $50,000, which are not available from conventional private or SBA sources.
For more information contact your local Evergreen Senior Loan Officer.