While stories abound about government programs that are wasteful and ineffective, the SBA 504 loan program is a refreshing exception that has helped thousands of small businesses. It has provided badly needed capital to borrowers while offering the credit enhancement that banks need to keep the money flowing. It allows for greater flexibility than its cousin, the SBA 7a loan, which I wrote about in an earlier posting. It doesn’t require that business assets other than the property being financed to be pledged as collateral.

Since its founding in 1953, the U. S. Small Business Administration has helped thousands of small businesses thrive and grow. By guaranteeing up to 90% of loans to small businesses, the SBA has enabled banks to expand their commercial lending, helping to create jobs and boost the economy. There are two main programs offered by the SBA, the “7a” loan and the ”504” loan. While both of these programs can be beneficial, there are some pitfalls in the 7a loan programs that every prospective borrower should understand before taking the plunge.

Sometimes when I am telling the Business Bank of Texas story, people are surprised and even doubtful to hear that our bank can help businesses with the same products and services as the big banks. In reality, our smaller and more responsive organization, dedicated only to serving the banking needs of businesses, can be even more effective.

As businesses grow, they often find that their control structure needs become more complex. This is usually because of an increased need to ensure that money is spent responsibly. Often, this means the need for multiple people to sign off on larger expenses, or for one person to have access to multiple accounts. But unfortunately, many banks’ bill pay systems don’t easily allow for complicated or customized control structures.

Big banks such as J.P. Morgan Chase & Co., Citigroup, and Bank of America are telling their largest customers- including major corporations and hedge funds- that they will begin charging fees on accounts that have been free in the past, the Wall Street Journal reports.

A Checklist For Business Owners

Our colleague Adrian Van Zelfden prepares this report annually and we are pleased he makes it available for us to share with you. Adrian is both a licensed CPA and tax attorney located in Austin, Texas. Adrian has also been an active member of the Texas Society of CPAs for a number of years.