SBA 504 Loan Program

The 504 Loan Program an attractive financing tool. The program provides growing businesses with long-term, fixed-rate financing for major fixed assets such as buildings, machinery and equipment. A typical 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50% of the project costs, a loan secured with a junior lien from a Certified Development Company (backed by a 100% SBA guaranteed debenture) covering up to 40% of the cost, and an equity injection of at least 10% from the small business. 

Benefits to Lenders:

Lower your Risk
Hold first lien position
Lend 50% of the project
SBA provides subordinated financing

Grow your Portfolio
Expand existing relationships
Add new clients with broader lending ability

Increase your Competitive Edge
Provide your business clients up to 90% project financing
sbaSTRATEGIES has SBA experts that can quickly answer SBA related questions for you and the borrower.  We can assist with the structuring and application process.

Advantages to the Participating Lender:
Attractive terms to customers with no additional costs; long term repayment term, low down payment.  
Great LTV means low collateral risk
Private lender has no specific restrictions on fees and rates
As a lender, you capture all deposit relationships, which means your relationship will grow as borrowers grow in their businesses
Many SBA 7(a) loans meet Community Reinvestment Act (CRA) compliance requirements
SBA 504 first mortgage secondary market available

Maximum sizes of the 504 loan:
$2.0 million for loans that meet SBA public policy goals (for example; the borrower is a woman, minority, or veteran-owned business; or located in a rural area).

$4.0 million

For loans to eligible manufacturing businesses
Projects that generate renewable energy like solar, wind or geothermal incorporation energy saving technologies that result in a 10% decrease in energy consumption.

1.5 million for standard 504 loan