General FAQ

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What makes Colorado Lending Source so special?

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How do I know which loan is right for me?

We’re here to help you figure that out. Click here to map your future and find out which loan is right for you.

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What is debt financing?

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What is the SBA 504 loan program?

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How is an SBA 504 loan structured?

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What is the SBA 7(a) loan program?

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What is the Community Advantage loan program?

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What is the Colorado Main Street loan program?

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How do I start the loan process?

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What do I need to include in my loan application?

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What collateral will you take to secure my loan?

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What can you tell me about Credit?

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What’s up with the gnomes?

A. What gnomes? Did you spot a gnome on this site?

Current Borrower FAQ

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Can you explain the different parties involved with my SBA 504 loan?

  • Bank - the lender for your first mortgage
  • U.S. Small Business Administration (SBA) - the lender for your second mortgage
  • Colorado Lending Source - the Certified Development Company (CDC) who services your loan on behalf of the SBA
  • Wells Fargo Corporate Trust Services - the Central Servicing Agent (CSA) who collects your monthly loan payment via an automatic checking account deduction known as an “ACH debit”
  • Investors - those who purchased the bond on Wall Street that funded your loan
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How do I make payments on my 504 loan?

Loan payments will be automatically deducted from your bank account by Wells Fargo on the first business day of the month. This process is known as an “ACH debit” and will post on your bank statement as WFSSBA504LN. The date of your payment cannot be changed.

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Can I make additional principal payments on my 504 loan?

No, due to the funding structure of the 504 loan we cannot accept additional principal payments on your loan.

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Can I change the account my 504 loan payment is pulled from?

Yes, you will need to fill out and submit a new ACH Debit Authorization form, which Colorado Lending Source can provide you with at any time.

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What is an Amortization Schedule?

An Amortization Schedule follows your loan payments and outstanding balance for the life of your loan. It also shows the principal, interest, and fees paid each month.

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What are the fees listed on my amortization schedule?

Three fees are included in your monthly loan payment:

  • SBA - the fee paid to cover any losses to the SBA 504 loan program
  • CDC - the fee paid to Colorado Lending Source for servicing your loan
  • CSA - the fee paid to Wells Fargo for handling the payment processing and loan accounting
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What is the interest rate for my 504 loan?

You can find interest rate details for your loan on the Amortization Schedule included in the electronic servicing binder we sent you post closing or by calling us at 303.657.0010.

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How do I report interest and fees for my 504 loan on my taxes?

Interest and fees are usually deductible as an operating expense for the entity that owns real estate and/or equipment. Your Amortization Schedule shows how much you pay each month in interest and fees. Colorado Lending Source will mail Annual Interest Statements by January 31st each year for tax purposes. Please verify all tax items with your accountant.

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What information about my business will you need from me on an ongoing basis?

  • Annual tax returns for your operating company (OC) and real estate holding company (EPC)
  • Any insurance certificates (hazard/property, business personal property, flood, condo association, etc.)
  • Any updates to your contact information
  • Access to the property for site visits as needed
  • Job creation numbers two years after your loan has funded
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How is the prepayment penalty for my 504 loan calculated?

The documents you received at your loan closing and after funding detail the penalty for paying off your loan early. This prepayment penalty exists for the first 10 years of the loan. The prepayment penalty for the first year of the loan is the interest rate on your loan. The prepayment penalty then declines by one-tenth of that rate each year until the end of year 10, when it disappears.

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Do I need to let you know if I change my insurance agent?

Yes, please send us the new agency and agent name, mailing address, phone and fax numbers and new policy number.

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What happens if I need to add a new owner or remove a current owner from my business?

In order to add or release any owners holding 5 percent or more of the business, you will need to contact us.

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What if I want to expand my existing building?

Your best option in this case may be to finance the expansion with an additional 504 loan. In many cases we can count the equity you have available in your property as a down-payment towards your new loan.

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Can I refinance my first mortgage?

1. There are typically two situations in which you may be considering refinancing you bank loan: 1. A drop in interest rates

2. Changing banks Regardless of the reason, we will need to discuss this change with you in order to document the change on our end.

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Can I apply for additional financing if I haven’t paid off my existing 504 loan?

It’s quite possible that you are eligible for additional funding under the Small Business Administration’s loan programs. The amount of additional financing you can obtain will depend on the size of the new project you wish to fund and the details of your current loan. Funds available to you can be used to expand an existing building or finance a new project. The application process is typically easier the second time around.

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What happens to my loan if I sell my business?

There are several options available to you should you wish to sell your business. Typically the loan is paid off, but the remainder of the 504 loan is also assumable (can be transferred to the buyer). You will need to contact us in advance of any negotiations with the buyer so we can assemble the necessary information to determine if the assumption can take place. Please note there is a 1 percent assumption fee on the remaining balance of the loan.

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“Hi, I'm Lauren. Call me with questions about funding your business. ”

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