SBA 504 LOAN

SMALL BUSINESS ADMINISTRATION

SBA 504 LOAN

The CDC/504 Loan Program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation. Fixed Assets for a business are existing buildings, land, new facilities, machinery or equipment. Land, streets, utilities, parking lots, landscaping and existing facilities are examples of to promote business growth.

OVERVIEW

Purpose:

  • The SBA 504 loan is to fund a business project(s) for the purchase, lease improvements, renovation and ground up construction of long term fixed assets for its business operations, which includes real estate and expansion.
Loan Amounts:
  • $5 million

  • $5.5 million for Small Manufactures and Renewable Energy projects that will reduce energy consumption by 10%
Terms:
  • 10 years

  • 20 years

  • 25 years
Eligibility:
  • Operate as a for-profit company in the United States or its possessions

  • Have a tangible net worth of less than $15 million

  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application

Occupancy
  • Existing Buildings – Business must occupy at least 51% of the project within one year of ownership

  • New Construction – Business must occupy at least 60% of the project upon occupancy and 80% within 10 years.

  • The borrower may form a real estate holding company that leases 100% to the operating business, which then subleases surplus space (up to 49%).

Leverage
  • Up to 90% for established businesses

  • Up to 80% for new businesses or special purpose property

Examples of Qualified Purposes
  • Purchase of Real Estate

  • Purchase of land and construction of new building incl. 10% of construction reserves

  • Soft cost towards funding

  • Expansion or remodel of existing building

  • Tenant improvements (TI) and infrastructure to building or business Renewable energy projects

  • Outfitting the business with furniture, fixtures and equipment.
Examples of Qualified Properties
  • Assisted Living facilities

  • Auto Repair

  • Office Buildings

  • Medical offices or facilities

  • Day Care(children and adult)

  • Warehouses

  • Hospitality

  • Restaurants
SBA 504 LOAN
SBA 504 LOAN
SBA 504 LOAN

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