What are the terms of the conventional (bank) loan?
The bank loan carries market rates and fees and may be structured as a fixed or variable rate loan. The bank also pays a fee guaranty or subordination fee of ½% of their loan to the SBA, which is typically passed on to the borrower. Although a complete funding proposal is prepared by Bay Area Development Company, it is the client who negotiates the bank rate and terms. The bank loan cannot have call provisions or balloon payments in the first 10 years of the loan.
