SBA 504 Loans
A SBA 504 loan is a long-term, fixed rate loan for growing businesses with major fixed assets, such as land or buildings. Proceeds from the loan must be used for fixed assets, such as purchasing land, existing buildings, new facilities construction or machinery and equipment. Proceeds of a 504 loan cannot be used for working capital, repaying or consolidating debt, or refinancing.
Features:
As little as 10% down payment
Conserves company’s capital
Competitive fixed and variable-rate financing
Use of Proceeds:
Acquisition or construction of owner-occupied commercial real estate (business must occupy at least 51% of the facility for acquisition and 60% for construction)
Project Size:
Non-manufacturing - $250,000 to $8,000,000
Manufacturing - $250,000 to $10,000,000
Typical Structure:
First deed of trust – Western Commercial Bank (WCB) 50%
Second deed of trust – SBA/CDC 40%
Equity investment 10%
Loan Terms:
WCB - Up to 20 years fully amortized
SBA/CDC 20 years fully amortized
Interest Rate:
Fixed or Variable
Eligibility:
Must be a for-profit business
Together with its affiliates, business must have a tangible net worth not exceeding $7.5 million, and an average net income after state and federal income taxes for the previous two years not to exceed $2.5 million
All owners of 20% or more of the business are required to guarantee
The personal liquidity of each 20% owner may affect the equity investment requirements
Organized as sole proprietorship, corporation or partnership
Collateral:
1st and 2nd deed of trust on subject property
For more information on SBA 504 loans and to find out additional details on how your business may qualify call us at: (818) 449-7700
