Barbara Morrison: One of the key benefits of SBA 504 loans is the ability to access to up to 90% financing. This compares favorably to conventional real estate financing, which is usually between 70% and 80%. With a down payment as low as 10%, businesses can maintain liquidity and reinvest capital in new jobs and growing the business. In addition to preserving working capital, SBA 504 loans also provide the advantage of having no balloon payments or additional collateral required in the loan. With fixed-rates overhead costs are stabilized and business owners can build equity.

GlobeSt.com: How would you describe the state of the SBA 504 financing environment?

Barbara Morrison: The SBA financing market is extremely active. Rates remain at historic lows for long term fixed rates, allowing business owners to lock in low rates for the foreseeable future.

In 2011, the SBA expanded the 504 program, allowing both small- and mid-sized companies more access to capital. These changes included increasing SBA's standard financing limits from $2 million to $5 million and opened eligibility of the program to larger businesses. Now private, for-profit businesses with a net worth of up to $15 million, and a net income up to $5 million can qualify.

Beginning April 21^st, 2014, the SBA is introducing even more improvements to the program, making it easier for businesses to qualify for 504 loans. There are two significant and helpful changes. First, the SBA is waiving the requirement for a personal resource test that historically restricted higher net-worth owners from participating. Second, owners will have the ability to justify expenditures towards completed building improvements outside of a nine-month window. This expands the possible uses of what qualifies for financing.

GlobeSt.com: Where are you seeing the most SBA 504 financing in terms of property types and submarkets in California and Nevada? What trends are you seeing with SBA 504 financing?

Barbara Morrison: The SBA 504 program is able to finance companies and properties that may not meet conventional lending requirements. Property types that can be more difficult to find financing for include parking lots, gas stations, dry-cleaners/laundromats, hotels or even equipment-only loans, can qualify for SBA 504 financing.

In 2013, the top industries to take advantage of the SBA 504 program in California and Nevada were manufacturers, retailers/wholesalers, medical and health services, construction and hospitality. These represented about $1 billion in SBA financing, which accounted for almost 80% of total lending in this region. We see this trend continuing in 2014.

One positive trend we love seeing are how many small businesses are taking advantage of the SBA 504 Green Energy Program. When companies reduce their buildings energy by 10 percent, or produce 10% of their energy from renewable sources, they are able to qualify for more money from the SBA, and are unrestricted by standard SBA lending limits. This means growing business who invest in going green, can use the SBA 504 program for multiple projects each with an SBA 2^nd mortgage of up to $5.5 million and no limit to the total project costs. There is a significant source of funding available under SBA's Green Energy Program.

GlobeSt.com: How has the challenging economy impacted SBA 504 financing activity?

Barbara Morrison: I think we can all agree that the economy has improved significantly since early 2009. We can see this directly in our borrowers' financial performance. As the economy continues to improve, SBA 504 financing activity is sharing the stage with the resurging conventional lending market.

Despite this being a great time to buy, the biggest challenge we've seen for business owners is actually the lack of inventory available for sale. It's tough to find the right building in the perfect location, but when you do, it can make a big difference for the right company. When values rise to pre-recession levels, we believe we will see more buildings become available for sale, but this does not happen overnight.

Another challenge, unique to SBA 504, is the perception that having a loan through the government means having to go through lots of red tape. Contrary to this opinion, SBA 504 lending can often provide an average turnaround time of three days, from submission to approval, which is often quicker than conventional sources.