SBA-504 LOANS
Now fixed for 25 years!
ELIGIBILITY
Must be a for-profit business. Non-profit groups such as churches are not eligible.
Must achieve an eligibility goal of SBA (usually easy to do).
Must be classified as small (net worth under $15 million & net profits under $5 million).
Owner must occupy 51% of an existing building or 80% of the newly constructed space.
Investment properties such as apartments and strip shopping centers are not eligible.
Speculative ventures (such as subdivision development) are not eligible.
Debt refinance allowed in some instances.
ALLOWABLE USES OF PROCEEDS
Acquisition of vacant land for construction.
Acquisition of existing land and building.
Building construction and/or renovation.
Machinery, equipment, furniture, fixtures located in building being financed.
Associated soft costs such as architectural fees, engineering, surveys, appraisals, etc.
Typical Project
Sources
Costs
Land Purchase
Building Construction
Machinery
Soft Costs…
$ 200,000
$ 700,000
$ 75,000
$ 25,000
Bank (borrower selected)
SBA/CSRA 504 Loan
Borrower Equity (Down Payment)
$ 500,000
$ 400,000*
$ 100,000
TOTAL
$ 1,000,000
TOTAL
$1,000,000
Note: (Loan can be up to $5,500,000 if the loan is to a manufacturer.)
*Maximum amount of 504 2nd mortgage loan can be $5,000,000
RATES, TERMS, AND FEES
Bank sets rate on their first mortgage loan. If SBA term is 20 or 25 years, the bank term must be 10 years, but the rate can be adjusted.
Bank must pay a one-time fee of ½ of 1% fee to SBA for participating in the program.
All SBA 504 bond costs are financed into the loan.
SBA 504 loans are assumable.
COLLATERAL
Typically project collateral stands for the loan on SBA-504 loans.
Want to learn more and see exactly how the SBA-504 program may benefit you?
Contact us and we will reach out to discuss your project and prepare an SBA-504 estimate showing all the project uses, proposed payments, and fees. It will be emailed to you within 24 hours.
Randy Griffin, President - rgriffin@csrardc.org (706-210-2010)
Cody Shepherd, Executive Vice President - cshepherd@csrardc.org (762-333-8045)
Kim Walton - kwalton@csrardc.org (706-651-7306)