|
|
Business Owners II
Benefits of SBA 504 Loan
- Low down payment:
- Up to 10% down payment required
- Help the business to retain working capital for continual growth and expansion
- Start-up or single purpose building requires up to 15% equity injection
- Start-up and single purpose building requires up to 20% equity injection
- Long term, below market and fixed rates
- Fixed rates for 20 years on the SBA 504 portion
- Fully amortized
- 51% occupancy required
- 51% owner occupancy for existing building purchases
- 60% owner occupancy for new construction
- Financing closing costs
- Financing on SBA loan fees available
Example of SBA 504 Loan Structure
- SBA 504 Project Costs
-
| Acquisition of Land and Buildings: | $1,600,000 |
| Renovations: | $200,000 |
| Machinery or Equipment: | $100,000 |
| Soft costs (Professional fees, closing costs, etc): | $100,000 |
| Total | $2,000,000 |
- SBA 504 Finance Structure
-
| Source of Funds | Loan Amount | % | Interest Rates | Amortization | Collateral |
| Partner Bank | $1,000,000 | 50% | Fixed or Variable | 15 to 30 Years | 1st Trust Deed |
| ANP (CDC) | $800,000 | 40% | Fixed | 10 or 20 Years | 2nd Trust Deed |
| Borrower | $200,000 | 10% | | | |
| Total Financing $2,000,000 |
Loan Package Checklist
|
