504 Loan Program Details

Eligible Use Of Funds

  • Purchase of land and existing buildings
  • Construction of new facilities, including infrastructure costs, utilities, parking lots landscaping and professional fees
  • Modernization, renovation or conversion of existing facilities
  • Expansion of existing facilities
  • Purchase of machinery and equipment with a useful life of 10 years of more

Ineligible Use Of Funds

  • Working capital
  • Inventory
  • Consolidating or repaying debt
  • Purchase of goodwill
  • Refinancing current debt
  • Franchise fees
  • Vehicles or airplanes

Terms

  • Maturities of 10 and 20 years are available
  • Loan is fully amortized over the chosen 10 or 20 year term
  • Lines of credit are not eligible

Fees

  • Fees total approximately three (3) percent of the debenture and will be financed into the SBA loan

Minimum Debenture

  • The minimum debenture for the SBA portion of the loan is $60,000.  This equates into a total project amount of about $150,000

Maximum Debenture

  • $5 Million for most 504 loans
  • $5.5 Million for small manufacturers

Borrower Injection

The borrower may provide the 10-20% injection in the following ways:

  • Personal or business cash
  • Equity in real estate (special conditions apply)
  • Personal or business loan

Amount Financed 

Typically, the Partner Bank finances 50% of the total project amount, the SBA finances 40% and the small business injects 10% cash/equity. If the building is deemed Special Purpose, the borrower would be required to inject an additional 5% cash/equity, for a total injection of 15%. If the business is considered a New Business, the borrower would be required to inject an additional 5% cash or equity, for a total injection of 15%. If the business is a new business and the building is  special purpose, the borrower would be required to inject an additional 10% cash or equity, for a total injection of 20%.

Get Started Today

Contact us to get more info to see if your business is right for a 504 loan. Lets get the ball rolling, one of our loan officers will be in touch with you shortly:
Get Started