What is the purpose of the loan?

  • Land acquisition and improvements
  • Construction of new facilities
  • Purchase of existing or build-to-suit facilities
  • Renovation or restoration of existing facilities
  • Equipment and machinery purchases
  • Refinancing existing debts

What is the qualification?

Eligible Business:

  • Must be an operating for-profit business
  • Must be a legal entity such as a corporation, partnership, sole proprietor, LLC, etc.
  • Must use the financing for a project located in the U.S.
  • Must have a tangible net worth of less than $15 million and profits after tax of less than $5 million for the previous two years
  • Business owner must be a U.S. citizen or resident alien with a green card
  • 51% owner occupancy for existing building purchases, 60% owner occupancy for new construction

Ineligible Businesses:

  • Not-for-profit businesses except sheltered workshops
  • Businesses engaged in lending as banks and finance companies
  • Insurance companies, however, an insurance agency is eligible
  • Businesses located in a foreign country or owned by aliens
  • Businesses selling through a pyramid plan, illegal businesses
  • Businesses engaged in loan packaging
  • Business engaged in political or lobbying activities and speculative businesses
  • Business or applicant involved in a business which defaulted on a Federal Loan
  • Business which present live performances of a prurient sexual nature
  • Government-owned entities
  • Business with an associate who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral turpitude

Loan Structure?

General SBA 504 Loan Amount Up to:

Bank          CDC          Total
(50%)        (40%)       (90% w/owner’s injection 10%)

  • Example 1: $6.25 Mil + $5.0 Mil = $11.25 Million
  • Example 2: $6.88 Mil + $5.5 Mil = $12.38 Million (Manufacturers)

Key Advantages of the SBA 504 Loan:

  • Lower Down Payment as low as 10%
  • Fixed rate with longer term (20 years)
  • Lower interest rate

Processing Time:

  • Approximately 45 days

 

SBA 504 Loan for asset financing for Qualified Small Business Owners

“SBA 504 means up to 90% Loan Financing.

Borrower’s participation will be at least 10% of the project cost.”