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.

CSRA Pie Chart.jpg

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 years, bank must be 10. 

  • 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 see exactly how the SBA-504 program may benefit you? 

Complete the following, and we will prepare an SBA-504 estimate showing all the project uses, proposed payments, and fees. It will be emailed to you within 24 hours. 

Name *
Name
Have you been in business two or more years? *
(Manufacturer, Restaurant, etc.)