When it comes to a certain classification of business loans, Debra Alexandre has the market cornered.
In fact, it is unlikely anyone in Las Vegas is more familiar with U.S. Small Business Administration 504 loans, how they operate and the economic benefits they provide than Alexandre, who is president of the Nevada State Development Corp.
SBA 504 loans are business loans for the purchase of fixed assets — usually real estate, buildings and machinery — at below-market interest rates.
The 504 program works by distributing the loan among three parties. The business owner puts in a minimum of 10 percent, a conventional lender, usually a bank, puts up 50 percent, and a so-called certified development company puts up 40 percent.
The Nevada State Development Corp. is a nonprofit corporation established in 1981 to facilitate the growth of small businesses. Today, the organization has 16 employees and offices in Las Vegas and Reno.
Alexandre said the NSDC has issued 1,510 loans valued at $667.4 million.
“Our loan volume is very strong as the economy in Nevada recovers,” Alexandre said. “We typically finance long-term fixed assets, primarily owner-occupied real estate and small businesses. Everything we do is to support small business owners.”
She said the NSDC does not have an economic development mission.
“We are not the Las Vegas Global Economic Alliance,” Alexandre said. “We do work alongside other entities when small businesses need financing. We are always happy to refer a business to another organization.”
Alexandre took over the NSDC in 1992 after a successful career in banking that included stops with Nevada State Bank and Sun State Bank.
“The great thing about my job is that I work with a staff ... eager to develop relationships with small-business owners in Nevada,” she said.
Alexandre took a different route to a finance career. She was a former biology major at the University of Nevada, Las Vegas, studying to be a physical therapist.
“I got a job as a teller at a bank,” Alexandre said. “It was just a job on the way to what I wanted to be. But finance ended up being my career.”
Question: What is the Nevada State Development Corp.’s mission?
Answer: We are certified by the U.S. Small Business Administration to handle SBA 504 loans. We use SBA 504 loans to finance long-term fixed assets, primarily owner-occupied real estate and small businesses. Everything we do is for small business Nevada.
We provide up to 90 percent financing and are funded at rates typically below market.
Question: Is the NSDC well known to the public?
Answer: In our industry, we are fairly well known. It has always been a challenge to get information about what we do out to the general public. We provide businesses loans with low down payments and below-market rates so they can own their own buildings. It’s not difficult to get an SBA 504 loan. You’ll know within 72 hours if you qualify. It really doesn’t take a lot of time to do the paperwork, and we’re about as intrusive as a bank loan.
Question: Do you get more loan demand during recessions or recoveries?
Answer: Our loan volume is very strong as the economy in Nevada recovers. Like everyone lending to the commercial real estate industry, our loan volume was down during the recession. As the economy becomes even stronger, we expect increased interest and loan volumes.
Question: Is the Nevada economy improving?
Answer: We do see a recovery in Nevada, maybe not as fast as we want it to be. Over the last 10 months, we’ve helped a lot of businesses from tents to pies to dog trainers. It’s been across the board in terms of loans, and across the board in terms of improvement.
Question: Is there a difference in loan type, Northern and Southern Nevada?
Answer: It is pretty much the same in terms of the recovery. As for types of loans, it’s kind of different between Clark and Washoe counties and the rural areas.
In the urban areas it runs the gamut, but we’ve done a lot of office and industrial lending. In the rural areas of Nevada, the loans are for hotels and groceries.
Question: Was there a difference in the recovery between Northern and Southern Nevada?
Answer: I did notice that the recovery started a little sooner in the north. I really couldn’t tell you why. But now it’s about equal.
Question: Why is the NSDC lobbying for passage of the Commercial Real Estate and Economic Development Act of 2013, or CREED?
Answer: We had under the Small Business Jobs Act a temporary debt refinance program that allowed existing small business to refinance their 504 loans. The program expired in September. It really benefited small businesses.
If they had a balloon payment at the end of the loan or the decline in property values wasn’t enough to support the amount of the loan for renewal, it allowed them to refinance and retain capital that could be reinvested in the business. CREED is a bill that brings the program back and makes it permanent.
Question: Are banks your competition in the SBA 504 loan business?
Answer: Banks are not our competition, but our partners because of the way the loans are structured.
We provide up to 90 percent of the financing, with 10 percent of the equity injected from the borrower. The bank will pick up 50 percent, while we’ll come in behind with 40 percent of the SBA 504 loan. We are partners for the life of the loan.
The 10 percent down is far below the 25 percent to 30 percent of a conventional loan.
Question: Can you explain the NSDC’s VetLoan Advantage program?
Answer: It’s a new program we rolled out in June.
The idea behind VetLoan Advantage is to make it easier for veterans to start or expand small businesses by rebating up to $3,000 to the veteran.
Other than the rebate, the program operates similar to the SBA 504 loan program.
It doesn’t sound like a lot, but the program allows veterans to recoup some of their upfront costs.
Contact reporter Chris Sieroty at email@example.com or 702-477-3893. Follow @sierotyfeatures on Twitter.