CDC Direct Capital has announced an SBA 504 Secondary Market solution with the Morgan Stanley SBA 504 First Mortgage Secondary Market Program. This program enables a bank to sell the entire first mortgage on any SBA 504 loan.
Morgan Stanley is offering a 100% loan purchase program pertaining to the SBA 504 loan program available through CDC Direct Capital. Morgan Stanley will purchase 100% of a first mortgage of an SBA 504 loan. When a bank sells the entire 504 first mortgage loan its benefits will include
- increased liquidity and capital;
- premium income generated from sale of the loan; and
- an ability to offer more competitive rates and terms as well as obtain regulatory relief through the minimization of commercial real estate loans.
“This will be a great addition to the developing secondary market for SBA 504 first mortgage loan sales,” commented Michael D. Sneden, Executive Vice President of ValueXpress. “Unfortunately, the program will not accept special purpose properties such as hospitality and restaurants, which have limited options in today’s market and therefore are less competitive for lenders to win the business. Hopefully that segment will open up in the future.”