What is SBA 504 Loan ?
The SBA 504 loan program, also referred to as CDC/504 loan program, offers long-term, fixed rate financing for substantial fixed assets that support business expansion and job development.
How the 504 Loan Works ?
Loans are available through the SBA 504 loan program to assist with paying for fixed assets or real estate. These loans are provide low interest rates, minimal down payments, and favorable terms.
504 loan program works by distributing the loan among 3 parties. A conventional lender contributes 50%, the business owner a minimum of 10%, and CDC contributes the remaining 40%.
How an 504 Loan is Structured ?
Who is Eligible for SBA 504 Loan ?
To qualify for 504 loan, business must operate in US or any of its possessions as for-profit business and applicants must have a tangible net worth of less than $15 million.
How to Use a 504 Loan ?
504 loan can be used to purchase fixed assets, these include new building, equipment or machinery. You can also use loan to build or upgrade facilities, including utilities, streets or parking lots.
How to Repay 504 Loan ?
Large business expenditures like real estate or equipment can be financed over a long period of time with the help of SBA 504 loans. Available maturity terms are 10 and 20 years.
What is the Maximum 504 Loan Amount ?
504 loan can be for a maximum of $5 million. Borrower eligible for up to 3 projects totaling a maximum of $16.5 million for specific energy projects worth up to $5.5 million each.
How to Apply for a SBA 504 Loan ?
You must find a Certified Development Company (CDC) in order to get an SBA 504 loan.