Nicole Perdoni-Byrne, a banking, finance, and real estate attorney at Roszel Road-based Hill Wallack, knows how people see the Small Business Administration and its loan products. Essentially, people see the agency the same way they see the IRS, which is to say complicated and usually more than a little scary.
Up until a few years ago, those worried folks would be right, but the SBA, says Byrne, has actually been working hard recently to streamline and de-intimidate the loan process. It has also been working hard to let budding dreamers and entrepreneurs know about its new, revised, and expanded loan products, which, it turns out, help businesses a bit bigger than you might think when someone says “small business.”
Byrne will be a panelist at the Mid-Jersey Chamber’s “From Start to Finish: How to Score a Business Loan” seminar on Wednesday, May 18, from 8 to 10 a.m. at the Hilton Garden Inn-Hamilton on Route 130. Joining Byrne will be moderator Paul Watter, also an attorney at Hill Wallack; Alfred Titone, district director of the Small Business Administration; William Pazmino, executive director of the Regional Business Assistance Corporation; and Shaun Reiss and Jane Massi, both vice presidents and senior relationship managers at M&T Bank. Cost: $25. Visit www.midjerseychamber.org or E-mail Kaitlin@midjerseychamber.org.
Byrne grew up in Jamesburg and Monroe before heading to Rutgers to study history and political science. She knew since high school, thanks to a particularly good history teacher who always framed his lessons in legalistic ways, that she wanted to go to law school.
She is the only lawyer in her family. Her mother is a pediatric nurse, her father was an electrical engineer, and her husband is a fireman.
After graduating from Rutgers in 1994, Byrne worked as a paralegal, mostly working in residential real estate law, to put herself through Seton Hall Law School. Working full-time and going to law school at night meant two things: she got to meet a lot of people who, like her, were working really hard to pursue their dreams, and she “didn’t get much sleep in those days,” she says.
After graduating from Seton Hall, Byrne went to work for Hill Wallack and has progressed from residential to commercial law and into more specialty areas, including business financing. She is also one of the few SBA-designated attorneys in New Jersey, which she says means she is “blessed by Washington to close 504 loans.”
What it is. The CDC/504 (certified development company) loan is the one that gives more money and a really solid structure to small businesses, Byrne says. Whereas most SBA loans — or, at least most perceptions of SBA loans — figure them to be in the low hundred-thousands area, 504s can be in the millions. “There are significant dollars available to borrowers,” she says.
Another advantage: CDC/504s come with a fixed 20-year rate, currently around 5 percent, meaning one less variable for business owners to contend with.
A 504 is 40 percent of the overall financing package, Byrne says. Half of the package comes from the bank and the remaining 10 percent from the entrepreneur(s). This, she says, is a colossally good deal in how much it frees up a business’s cash for startup. Too many businesses focus on the operations and neglect things like advertising and even business cards, which they suddenly realize they need but have to skimp on. With this loan balance new business owners can allocate their money with a little more freedom.
The real deal. Byrne’s job these days gives her the privileged perch from which to see both sides of the issue when it comes to SBA financing. She works with lenders and helps business owners get through the paperwork. With the borrowers, she says, “we have a great feel for where they fit in the lending process.” She will set up meetings with lenders, point borrowers to the right set of lenders, and set up meetings with the right CDC.
Another way she helps borrowers is to encourage the thought of actually owning the property on which they want to do business. Many business owners don’t think of owning real property when they start up, she says. But the SBA and the federal government are hoping to change that.
The CDC/504, Byrne says, is real estate-based, meaning it encourages property ownership with the intention of retaining businesses and employers in the states they start up. In New Jersey, she says, that idea is gold, as the “exodus” of people leaving the state due to high taxes and financial burdens is a serious problem.
The 504 is also real estate-based in that it allows for business owners who do buy property to sublease up to 49 percent of their ground, meaning an additional source of revenue.
“A lot of business owners just don’t think of that,” she says, referring to the idea of owning a property. “People need to think through the whole process and the value of the real estate as well.”
Faring well. Given the state of buying and maintaining real property in New Jersey, it would be easy to think the buy-with-your-loan angle would be a hard sell. Not so in Byrne’s experience, however. While she does not have overall numbers and wouldn’t want to speculate, she does say that she has personally seen “an awful lot of volume” when it comes to 504 applications, and that includes those with the prospect of buying property (which, by the way, is one reason these loans can surpass the $2 million mark).
People, Byrne says, really do want to do business in New Jersey. They are tied to the state, by family, by history, by proximity to trade centers, whatever. They want to be here, and the federal government and SBA, she says, “are trying to streamline the process and make it less intimidating.”
For Byrne, the real reward is that she gets to help a business open its doors and see business owners realize their dreams. This isn’t merely some abstract, feel-good schmaltz, she says, but rather the heart of getting into business. It’s about people doing what they want and love, and about their families, who live these hopes and dreams with them. And she loves being able to sit in a restaurant and have dinner, knowing she played a part in getting that plate to her table.
“It’s the humanity,” she says. “By the time we close, we’ve gotten to know these people and their families. People are crying at the table; we’ve opened champagne. They’re finally doing it. It’s a very rewarding process watching somebody realize their dreams.”