SBA 504 Loans


The Definitive Loan in our arsenal.

The 504 Loan program was created in 1986 by Congress to help small businesses in acquiring fixed assets through long-term financing for business start-up or expansion, and to provide incentives to private lenders to participate in financing business expansion.  If you are new to the SBA 504 loan program, we encourage you to watch the SBA 504 Video.

HOW DOES THE 504 PROGRAM WORK?   

The bank works with the Business Lending Center to share the financing and risk in an approved project.  The bank provides a loan for half the project cost and acquires the first lien on the property; the Business Lending Center provides 35% to 40% of the project financing and takes a second lien on the property.

ELIGIBLE USE OF FUNDS

• Purchase land/construct new building(s)
• Purchase/renovate/expand existing building(s)
• Purchase machinery and equipment
• Professional fees (appraisals, environmental studies, etc.)
• Interim financing costs
• Contingency reserve not to exceed 10% of construction costs

BENEFITS OF THE 504 PROGRAM

• Long term loan (twenty or ten years) on fixed assets
Low fixed interest rate
• 80-90% financing of total project costs
• SBA loans are assumable