Frequently Asked Questions
"What can I do with SBA 504 Loan
as a small business owner?"
You can use SBA 504 loan proceeds to acquire land and building, FF&E purchase, leasehold improvement, and ground-up construction. Besides, you can cover soft costs (appraisal & environmental report, title insurance, and interim interest) with the loan.
"Can I refinance my current debt
with SBA 504 loan?"
Definitely! We can help not only with refinancing existing debt but also the additional loans with debt refinancing if you would like to expand your business. For the debt refinancing, more than 85% of the current debt should have been used to acquire fixed assets (land and building with improvements and machinery and equipment).
"What is the condition of
collateral and guarantee?"
The project property and the applicant's business asset must be our collateral. We require a personal guarantor for an individual who owns 20% or more of an applicant (Spouse owning less than 20% of an applicant must personally guarantee the loan when the combined ownership of both spouses is 20% or more).
"What documents need to be provided for pre-approval?"
We need several initial documents to be pre-approved. At the very first step, we need a completed and signed application and three years of personal and business tax returns. Additional documents will be requested upon reviewing of application and financials.
"How long do we need to stay
in the building to satisfy
owner-occupy requirement?"
The Operating Company must occupy the project property during the term of the loan (51% if existing building; more if new construction).
"What is the insurance requirement?"
Hazard insurance on the Project Property must be obtained prior to closing and must be current. The amount should be full replacement cost and must obtain a mortgagee clause in favor of the SBA and the CDC.