FDDC Blog

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Feature 504: Mr. Liquor, Rapid City, SD

Taking advantage of the SBA 504 program’s current record-low interest rates is Mr. Liquor in Rapid City, South Dakota. First District Development Company and Black Hills Federal Credit Union, Rapid City, paired up to offer Jason Dvorak an attractive commercial loan package for his latest business venture — the purchase and remodel of an existing building, and the purchase and installation of new furniture, fixtures, and equipment to open the doors to Mr. Liquor.


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504 Financing Structure

It’s as easy as 1 – 2 – 3…

1. A private lender typically finances 50% of the project cost and takes a first lien position on the assets financed. This lender provides a commercial loan at current market rates and fees for their share of the project. They also provide the construction or interim loan that is paid off from the proceeds of the SBA 504 loan.


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SBA 504 Exploding with Options

With rates at historical lows, let your mind explode with options to utilize SBA 504 funds. First District Development Company offers SBA 504 financing for small businesses at fixed, low rates they can use for the following:


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Lighten the Debt Load with 504 Refinance

Are you working through crisis mode with your clients, who need to relieve the stress of continued expenses with irregular revenue? Consider FDDC’s small business refinance possibilities through the SBA 504 program while fixed rates are low. Two options offered for refinancing under the SBA 504 program include: (1) Refinance existing debt along with an expansion of the project property or (2) Refinance only existing debt with no expansion costs (this option allows for some cash out for eligible operating expenses).

Here are more details for each type of 504 refinance…


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FDDC Awards Scholarships

As a partner to South Dakota’s small businesses, First District Development Company invests in economic development activities other than lending. This year FDDC offered five – $1,000 scholarships to students pursuing a post-secondary degree in a business/finance related field. Student applicants were evaluated based on their academic achievements, character references, a written essay, and involvement in community, school, extra-curricular, volunteer, and special interest activities.

Congratulations to these award winners who are being recognized for their hard work and determination! FDDC wishes them continued success in their future careers.


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SBA Payment Forgiveness (under the CARES Act)

In addition to specific disaster relief programs to assist small businesses, the CARES Act provides subsidy for certain loan payments under the SBA 7a and SBA 504 programs.

The SBA 504 loan payments are already being made under the CARES Act for existing 504 borrowers in regular servicing status starting with the April 1, 2020 payment. SBA 504 current borrowers will receive six months of payment forgiveness from April 1st to September 1st on their SBA 504 loan.


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Resources for Small Businesses in Unprecedented Times

Prior to the novel coronavirus (COVID-19) outbreak, small businesses were increasing in number and net job creation. Today, South Dakota small businesses are facing an unprecedented economic disruption and historic challenges due to the pandemic crisis. Cities have implemented mandatory closures of public spaces to ensure social distancing to prevent the spread of the virus, so those difficulties have only increased. With economic conditions changing rapidly, so are business resources and loan programs. In trying to keep up with the changing economic environment, First District Development Company (FDDC) has provided numerous emails and updates to lenders and clients. A collection of programs and resources are assembled on FDDC’s website on the events page: http://fddc.1stdistrict.org/events.

Here is a summary of programs that may interest you…


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FDDC – Open for Business

Like First District Development Company, businesses, educators, students, and families are experiencing life in new ways. Businesses in the hospitality industry have seen sales drop off, while businesses that provide video conferencing capabilities are experiencing skyrocketing sales.
Most businesses have adapted through alternative staffing schedules, limited services, or utilizing a remote workforce.


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Perfect Timing!

With rates at historical lows, it is a good time to consider utilizing an SBA 504 loan. We’re still processing small business loans for expansion, purchase, or to refinance existing real estate loans.


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Feeling Lucky?

You will – with the lowest fixed rates in the history of the SBA 504 program!

Both lenders and small business customers benefit from working with FDDC
and the SBA 504 Loan…