Morgan Stanley announced that it is going to allocate $500 million for purchasing real estate loans made to Small Business Owners. Initially the Morgan Stanley SBA 504 Program will be available through non profit Community Reinvestment Fund (CRF), USA and CDC Direct Capital, a subsidiary of CDC Small Business Finance.
The objective of Morgan Stanley SBA 504 Program is to help small businesses get long term financing, open new offices, purchase equipment and hire new staff. This program will also help banks to limit their credit exposure, reduce risks related to interest rate loans and fixed rate loans, retain liquidity and enable banks make SBA small business loans.
CRF and CDC Direct Capital shall work with national network of financial institutions so as to purchase Morgan Stanley pool of existing and new loans. As part of SBA 504 Program, first liens on commercial real estate can be used as collaterals for the new loans.
Ruth Porat, CFO, Morgan Stanley, says, “By extending financing for small businesses to invest and grow, Morgan Stanley is reaffirming our commitment to put our financial capabilities to work in the service of the economic development of communities.”
This loan program of Morgan Stanley can also be very appealing for thousands of small independent financial advisors and firms, who may require new capital in order to hire staff, invest in technology and open new offices. Morgan Stanley itself has more than 18,000 financial advisors and so any qualifying firm can be eligible for the program. This financial services firm will definitely consider transactions that meet SBA guidelines and other essential criteria.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to