The US Small Business Administration (SBA) created the 504 loan program in 1980 to provide accessible financing for growing businesses that seek owner-occupied commercial real estate.
The funds in a 504 loan can be used for the following:
• Acquisition of an existing building (51% occupancy)
• Building expansion or renovations
• Fixed assets from business acquisition
• Land and new construction
The 504 program as the following goals:
• Job creation
• Expansion of lending to women, minorities, and veterans
• Assisting US manufacturing
• Rural and undeserved area development
• Expansion of lending to businesses that "Go Green"
The Go Green qualifications are:
• LEED certified buildings
• Projects that reduce energy consumption by at least 10%
• Projects that generate renewable energy
• Qualify for purchase of multiple properties (no cap)
• Unlimited total project cost (SBA portion capped at $5.5 million)
Borrower contribution expected to be:
• As little as 10% down payment for most loans
• 15% for start-up businesses (within 2 years) or special use properties
• 20% if project is a start-up and a special-use property.
Are you qualified?
• Private, for-profit businesses in the US
• Business net worth less than $15 million
• Business net profit after tax (2 year average) no more than $5 million
• Seeking financing for equipment or an owner-occupied building (minimum 51%)
If you are curious whether an SBA 504 loan is right for you, please give us a call at 281-488-2022. One of our experienced Business Consultants will give you a free initial consultation.