SBA 504

Growth Financing With a Low Down Payment Coming up with a down payment of 20% or more knocks many small businesses out of the running for expansion financing. But there is another way. If you’re a healthy business whose expansion plans call for the investment and use of real estate or equipment, you may qualify for 90% financing through the SBA 504 Loan Program. The 504 Loan Program offers the following key advantages: Low down payment – you conserve valuable operating capital Competitive, fixed interest rate – no future interest rate fluctuations Long term – brings debt service in line with the cash flow generated by the asset

 

Typical 504 Financing Structure

 

Project Cost	Source	Lien	Funding Limits	Rate	Term Real Estate	Term Equipment
50%	Financial Institutiion	1st	Funding Limits	Market	10 yrs or longer	7 yrs or longer
40%	504 Loan	2nd	Min $50,000 Max $100,000.	Fixed	20 yrs	10 yrs
10%	Borrower

What SBA Seeks In A Loan Application: tthe applicant must first be eligible. Repayment ability from the cash flow of the business is a primary consideration in the SBA loan decision process but good character, management capability, collateral, and owner's equity contribution are also important considerations. All owners of 20 percent or more are required to personally guarantee SBA loans. Eligibility Criteria: All applicants must be eligible to be considered, the eligibility requirements are designed to be as broad as possible in order that this lending program can accommodate the most diverse variety of small business financing needs. All businesses that are considered for financing. Character Considerations: SBA must determine if the principals of each applicant firm have historically shown the willingness and ability to pay their debts and whether they abided by the laws of their community. The Agency must know if there are any factors which impact on these issues. Therefore, a "Statement of Personal History" is obtained from each principal. Other Aspects Of The Basic Loan Program In addition to credit and eligibility criteria, an applicant should be aware of the general types of terms and conditions they can expect if SBA is involved in the financial assistance.

Our knowledgeable and professional staff works directly with you to tailor a financing package that meets program guidelines and the credit criteria of your business. We are organized to assist in financing growth through investments that help businesses become more competitive in the marketplace.