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Loan program boosts business
Local business owners able to buy real estate with help of loan.
Date published: 10/8/2006
By JENN ROWELL Rich and Vicky Powell have owned Flemings Auto Care in Spotsylvania County since 2003, but they didn't own the building. In the spring, the owners of the building were looking to sell and the Powells called the bank to find out what kind of loans were available to them. What they found was the 504 loan program from the U.S. Small Business Administration. "The 504 program was made for small business to give you an opportunity to create wealth by owning your own real estate rather than renting it," Scott Dailey of SBA told the small group gathered on Friday for a check presentation to the Powells. With the 504 loan, the Powells needed only a 10 percent down payment rather than the 20 percent required by banks. "That made a world of difference," Vicky Powell said. "Without that we would have had to mortgage the house." The 504 loans are available to small business that want to transition from rented space to ownership of the building, or to build a new space, according to Robert Burke, executive director of Rappahannock Economic Development Corp. Small businesses interested in obtaining a 504 loan should first contact REDCO to start the application process. REDCO, a certified development company, handles all of the applications and services the loans, Burke said. About 73 small businesses in this area have gotten the loans. REDCO's investment in these businesses was about $13 million last year, Burke said, generating $38 million in economic development and 187 jobs. But not many small business owners know about the 504 loans, Dailey said. "It's a little known program, but it's so beneficial to small businesses," he said. "If the public knew about it, the volume would substantially increase, because it's such a good deal." For the Powells, being able to buy their own building put them more at ease. They've operated the auto-repair business on U.S. 1 near Massaponax since 2003. "The best thing now is that we own it," Vicky Powell said. "We don't feel bad about putting in the money for repairs." Owning the building also provides more stability, Rich Powell said. "You don't have to worry about when your lease is up and the rates change or you get booted out." To reach JENN ROWELL:
Read more stories about Fredericksburg Date published: 10/8/2006
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