Loan Programs: SBA 504.

SBA 504 (Small Business Administration)
allows for the following loan purposes:

  • Land acquisition and improvements
  • Purchase and/or renovate existing buildings
  • New construction
  • Equipment, furniture and fixtures
  • Project professional fees
  • Interest and ‘Points’ on interim loan

    • Typical Financing Structure for the Above Loans:

  • Bank – 50%
  • SBA – 40%
  • Borrower Injection – 10%.
    For a new business, Borrower Injection increases to 15%. Contact the RLC if other specifics are involved.

    • SBA 504 Loan Advantages:

  • FIXED rate for term of loan – normally below bank rates, no interest rate risk on SBA portion of debt
  • 20-25-year term on real estate
  • 10-year term on equipment
  • Preservation of capital due to low equity injection requirements
  • Most project fees (closing costs, appraisal, environmental and architect fees) can be financed
  • SBA Loan amounts up to $5 million to $5.5 million for manufacturers

    • Eligibility Criteria:

  • Business organized for profit
  • Combined tangible net worth of business and affiliates not to exceed $15 million
  • Combined net profits after taxes average less than $5 million for previous two years
  • Useful life of fixed assets must be a minimum of 10 years
  • Project must demonstrate job creation or retention