The 504 loan program
is a long-term financing tool for economic development within
a community. The 504 Program provides growing businesses with
long-term, fixed-rate financing for major fixed assets, such
as land and buildings.
Borrower Benefits
•
Low down payment of only
10%.
•
Long repayment terms
- reducing monthly payments.
•
Frees up cash flow to
expand your business.
•
Many rate options including
long term fixed rates.
Use of Proceeds
•
Purchase, construction
or renovation of owner-occupied commercial real estate.
•
Refinancing of existing
debt is not permitted with a 504. Please refer to SBA
7a for refinance transactions.
Standard Loan
Structure
•
50% financing - First
mortgage (up to $3 million).
•
40% financing - SBA 504
second mortgage (SBA/Certified Development Corporation
provides up to $2.0 million).
•
10% minimum down payment
by the borrower (15% in the case of special use properties).
Terms - First Mortgage
•
25 years, fully amortized.
•
Fixed, floating and adjustable
rates available.
•
Competitive fee structure.
•
Prepayment penalty applies
and is set based on various factors.
Terms - Second Mortgage
•
20 years, fully amortized.
•
Fixed rate is determined
at SBA-guaranteed 504 debenture sale.
•
Fees set by CDC.
•
Prepayment penalty for
initial 10 years, none after the end of year 10.
Pre-Screen
•
Pre-screen service available
within 24 hours with no charge or obligation by providing
limited information. Contact me for more information.
