SBA 504 loan program is for small business owners who want to replace the rent payment to their equity by purchasing owner-occupied commercial real estate. You can expect a below-market fixed rate, 25 years long term, and minimum down payment as low as 10%. Minimize your down payment with the SBA 504 loan and reserve fund for your working capital!
How It Works?
SBA 504 loan provides up to 90% financing
to small business owners with the best rates and conditions
Commercial banks will give you loans with the terms they set with Third Party Lenders of
SBA 504 loan program
CDC/SBA will fund at a low (lower than bank) and
fixed rate for the entire duration of the loan,
up to 25 years
This rate is typically about half the down payment of what the bank requires for conventional loans and for the SBA 7(a) program
What Can I Use it For?
Land Acquisition
and Improvements
Construction of
New Facilities
Purchase of Existing or
Build-to-suit Facilities
Renovation of
Existing Facilities
Equipment and Machinery
Purchases
(the minimum useful life of 10 years required)
Refinancing
Existing Debts
Maximum Project Amount
The maximum debenture that the CDC/SBA can fund as 40% of the project cost is $5MM in normal cases.
Exceptions:
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Eligible small manufacturers
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Eligible green energy project*
These two project could raise the debenture up to $5.5MM.
When a green energy project is involved,
a maximum of three loans can be generated for the CDC/SBA loan amount of $16.5MM
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Project size:
We do NOT have a maximum project size as long as the small business owners have the ability to put a down payment
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Check to see if your business qualifies as an Eligible Small Manufacturer with
'NAICS Code in Sectors 31, 32, and 33'
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*Green energy project:
Projects for the reduction of existing energy consumption by at least 10% OR Generates more than 15% of the energy used at project facility
Qualifications:
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Must be an operating 'for-profit' business
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Must be a legal entity:
corporation, partnership, sole proprietor, LLC, etc.
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Must use the financing for a project
located in the U.S.
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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
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51% owner occupancy for existing building purchases, 60% owner occupancy for new construction
How long does it take to process?
The processing takes approximately 45 days until closing.
*Keep in mind that the processing time varies depending on your document follow up speed.*