SBA 504 Loans

SBA 504 Loans 2017-05-18T14:26:10+00:00
SBA 504 Application & Forms
Uses
  • Purchase land and construction of new buildings
  • Purchase and renovate existing buildings
  • Purchase/install machinery and equipment
  • Purchase existing companies – fixed assets
  • Soft costs
Typical Financing Structure
  • Commercial Bank 50%
  • SBA 504 40%
  • Borrower 10%
Startup or Singular Purpose
  • Commercial Bank 50%
  • SBA 504 35%
  • Borrower 15%
Startup and Singular Purpose
  • Commercial Bank 50%
  • SBA 504 30%
  • Borrower 20%
Loan Term
  • 20 years on real estate
  • 10 years on equipment
Interest Rate (Fixed)
  • 20-year 4.82%
  • 10-year 4.81%
  • Refinance rate 4.86%
Loan Limits
  • $50,000 minimum
  • $5.0 million maximum
  • $5.5 million manufacturing companies (NAICS Sectors 31, 32 or 33)
  • $5.5 million energy reduction (10%) or use of renewable energy/renewable fuels production
Company Size Standards
  • Net worth in combination with affiliates cannot exceed $15 million
  • Average net profits last two years cannot exceed $5 million
Collateral
  • Second lien/mortgage on assets financed by SBA 504
  • Personal guaranty of 20% or greater company owners
Fees
  • 2.15% (financed in loan)
  • $2,000-$2,500 legal closing costs (financed in loan)
Loan Processing
  • 2-3 weeks
  • Borrower can incur eligible project costs before SBA 504 application – No time limit
Areas Serviced
  • Northeast Ohio/Ohio
Job creation/retention requirements*
  • One new or retained job per $65,000
  • One new or retained job per $100,000 for manufacturing companies
*Exception: Public Policy & Community Development Goals
  • No job creation/retention standard

Public Policy Goals:

  1. Expansion of small business owned and controlled by women, minorities or veterans
  2. Revitalizing a business district of a community with a written revitalization or development plan
  3. Expansion of exports
  4. Aiding rural development
  5. Increasing productivity and competitiveness (retooling, robotics, modernization, competition with imports)
  6. Modernizing or upgrading facilities to meet health, safety and environmental requirements
  7. Reduction of rates of unemployment in labor surplus areas; areas determined by Secretary of Labor

Community Development Goals:

  1. Improving, diversifying or stabilizing the economy of the locality
  2. Stimulating other business development
  3. Bringing new income into the community
  4. Assisting manufacturing firms (NAICS 31, 32 or 33)
  5. Assisting businesses in labor surplus areas as defined by the Department of Labor

Have Questions?

SBA 504 Application & Forms

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