Segueway to Success

Listen at – “Segueway to Success – the SBA 504 Program”

Previous Archived Shows – On Demand – “Segueway to Success” talk radio podcast  

By: Brent Hamachek and Tom Kuchan


Our “Segueway to Success” show, talking about our blog, airs each Wednesday at 15:00 CST.  Find today’s show and the archives on our web site:

On February 4th of this year, the senior member of the Segueway team will mark 28 years of working in and around the banking industry.

How things have changed!

It used to be the case that on a macroeconomic level the Federal Reserve (FRB) was the lender of last resort for member banks.  During the financial collapse of 2008 and since, the FRB has directly intervened in the banking system as a lender of first resort pumping liquidity into the system for reasons as much political as financial.  That topic is to be left for another blog or broadcast (actually, if the reader is interested you can listen to our archived show from January 16, 2013 when Matt Jensen from the American Enterprise Institute discussed such economic matters).

Like the FRB for the national banking system, the Small Business Administration (SBA) was considered the lender of last resort for American small, to middle market, businesses.  When Segueway principals started in banking, in order to get an SBA loan a commercial borrower had to produce three letters of denial from three different commercial banks.  Those loans were hard to process, expensive and inflexible.  Nonetheless, a loan from the SBA was better than no loan at all and a business owner would take it if they had to.

Again, how times have changed!

Even in advance of the 2008 collapse SBA lending skyrocketed in the United States.  No longer the lender of last resort, the SBA has become the preferred vehicle for many banks to utilize when first approaching a commercial loan request.  This represents a fundamental shift in how banks do business and how credit is allocated.  It also heightens the involvement of the Federal Government in determining how credit is allocated.  Whatever anyone might think about the policy implications, one thing is certain, SBA lending is now at the forefront of how small American business gets funded.

Some things remain constant.  There are still two primary SBA programs from which to choose depending upon the nature of the loan request.  The 7A, or Loan Guaranty program, involves a bank making a loan and the SBA guarantying any portion, up to 85%, of the loan’s principal balance.  This entices a bank to make a loan they otherwise would not because their loss exposure is greatly reduced.

The other type of loan, a 504 Loan, involves the SBA funding through a regional development group, of 40% of the total amount of the loan.  The bank has to fund 50% while the borrower must come up with the final 10%.  These types of loans are perfectly suited for the acquisition of real estate because they reduce the borrower’s down payment requirement (normally at least 25%) and allows a building to be bought, for example, when it otherwise could not be.

One of the development groups involved in 504 lending in Chicago is SomerCor504.   Founded in 1992, SomerCor504, Inc. is a non-profit development company certified by the U.S. Small Business Administration to originate SBA 504 loans (a CDC) in Illinois.  SomerCor holds a portfolio in excess of $360 million comprised of more than 750 loans.  SomerCor consistently ranks in the top 15 nationwide of all CDCs.

Join us on our show this Wednesday, January 30, when SomerCor504 President and General Counsel, David Frank, will be our guest and will fill us in on what is involved in getting a 504 loan for your business and what is, and isn’t, realistic to expect.


Segueway Solutions –

+1 (847) 778-9474

Brent E. Hamachek spent the first 15 years of his professional life in banking, working in 6 different sectors including audit, credit and 9 years as a commercial banker.

After commercial banking, Brent formed Segueway Solutions in 2000 in order to assist privately held companies in transition. To date, he has worked in 40 different industries and has served in the capacity of CEO, CFO & EVP Sales for clients. Brent is a sought after consultant, speaker and trainer offering national and foreign expertise to clients.

Tom Kuchan is a proven leader in global business expansion and effectiveness, risk management, finance and operations with experience in both Fortune 50 and entrepreneurial environments. He has a proven record of defining strategic objectives, translating them into operational tasks, and leading their implementation in diverse geographies and cultures across the globe.

Tom has lived overseas for over twenty years, including Switzerland, Germany and the United Arab Emirates, and has worked extensively across Europe, Latin America, Africa, the Middle East, and Asia.

Share This