SBA 504 Loan Program

Eligible Businesses

• The business must be a for-profit corporation, partnership, or proprietorship
• Net worth of business must not exceed $7,000,000
• Average profit after tax must not exceed $2,500,000 for the last two years
• Job creation of one job per $50,000 of SBA funds lent

Eligible Loan Uses

• Real estate acquisition
• New construction
• Renovation of existing buildings
• Machinery and equipment acquisition
• Project-related soft costs

Benefits

• Long-term financing
• Low down payment
• Fixed, low interest rates

Typical Financing Structure

• 50% bank or other private lender
• 40% CityWide SBA 504 loan
• 10% owner’s equity injection

Maximum Loan Amounts

• $50,000 - $1,500,000
• $1,500,000 - $2,000,000 if public policy goal is met
• Up to $4,000,000 if manufacturer

Term

• Real Estate – 10 or 20 years
• Machinery and equipment – 10 years

Rate

• Rates are fixed for the full term of the loan
• 20-year rate is approximately 2% above the 10-year treasury
• 10-year rate is approximately 2% above the 5-year treasury

Fees

• $100 application fee
• Approximately 2.15% of the SBA 504 loan amount, which is financed over the term of the loan
• $3,000 deposit due upon acceptance of loan commitment to cover out-of-pocket closing costs, i.e. legal, title, recording, etc.