ValueXpress recently entered a relationship with a private equity fund to originate SBA 504 loans utilized for the purchase of owner-occupied real estate properties. The investor will pool the 504 first liens and issue securities in the capital markets backed by the loans. ValueXpress will primarily use the program as an alternative to its existing national co-origination platform with a West Coast lender as that relationship will not accept hotels, prefers small balance loans and has very strict underwriting criteria. In addition, the new relationship is aggressive on larger SBA 504 transactions (more than $3.0 million) and has less-rigorous underwriting criteria.
“We have been very active in hospitality lending, but less so recently in the SBA 504 program because our national co-originator left the hotel market in 2009 based on regulatory pressures, and we were unable to find a suitable alternative,” said Michael D. Sneden, Executive Vice President at ValueXpress. “This new national hotel platform will allow us to get back in the market for SBA 504 hospitality loans and larger SBA 504 loans for other owner-occupied properties.”