San Diego-based CDC Small Business Finance, a nonprofit entity that partners with banks on commercial real estate loans guaranteed by the U.S. Small Business Administration, said recent SBA data shows positive signs for the California economic recovery.
The SBA data show financing for California hotels for the 2014 fiscal year made through the SBA’s 504 loan program is more than $163 million, or triple the $56 million advanced in FY 2013.
The state’s three top regions, the Bay Area, Los Angeles and San Diego rank in the top 10 nationally for hotel sales, according to a report from the California Hotel and Lodging.
Kelly Ryan, an SBA expert for CDC Small Business Finance, said hotel owners have leveraged the 504 loan capital to buy and improve properties. “SBA financing enables hoteliers to obtain multiple SBA loans for multiple hotels with no project size limit,” he said.
SBA 504 loans offer 85 percent fixed-rate financing for hotel purchase and construction. The current interest rate for a 20-year 504 loan is 5.06 percent, said CDCSBF.
In other news involving CDCSBF, former President Bill Clinton along with SBA Administrator Maria Contreras-Sweet acknowledged the organization for its use of SBA’s Community Advantage loan program.
The CDC is the nation’s leading provider of the micro loans of up to $350,000, and recently received a grant from Bank of America that will enable it to make more of these types of loans.