SBA 504 Loan Program

The SBA 504 loan program is a U.S. Small Business Administration funded program that provides financing for major fixed assets such as commercial real estate or equipment. The proceeds from this program may be used for the purchase of land/including existing buildings, the purchase of improvements such as utilities, parking lots and landscaping, the construction of new facilities or renovating existing facilities, and the purchase of long-term machinery and equipment.  This loan program cannot be used for working capital or inventory.

Typically the structure of the 504 loan program is as follows:

• 50% Lender
• 40% SBA 504 Loan
• 10% Borrower(s)

Is my project eligible?

The SBA 504 loan is available to individual business owners or multiple owners partnering on a project.  Businesses must be for-profit enterprises with a tangible net worth less than $15 million.  Net profit after taxes must not exceed $5 million during the previous two years.

Eligibility questions:

• Do you operate as a for-profit business?

• Do you have tangible net worth less than $15 million and an average income less than $5 million after taxes for the preceding two years?

• Will this loan finance an approved purpose, such as the acquisition of a building, the construction or renovation of a real estate, or the purchase of equipment?

• If acquiring an existing building will your business occupy 51% or if constructing a new building will your business occupy 60% now or 80% long term?

• Are all owners (20% or more ownership) willing to guarantee the loan?

If you answered “Yes” to all these questions, you are likely eligible for the 504 loan program.

Examples of eligible projects:

• Auto Dealerships
• Auto Repair Shops
• Childcare Centers
• Distribution Centers
• Hair Salons
• Heating/Mechanical Services
• Hotels/Motels
• Internet Companies
• Law Offices
• Medical/Dental Offices
• Restaurants
• Retail/Wholesale Companies
• Veterinary Offices
• Warehouses

Contact the Loan Officer