Lenders


SBA 504 Loan Program


If you are looking for long term, fixed-rate financing to buy or build your own facility, the SBA 504 loan program provides this. 20-year fixed rate for real estate and 10-year fixed rate for equipment. Other advantages are low down payment and below market rate interest rate. The SBA 504 requires a minimum of 10% down payment where a conventional bank loan requires 20% (an additional 5% equity is required for a start-up business, 5% equity is also required on special purpose facilities).

The term of the loan depends upon the nature of the proceeds:

* Land and Building – 20 years

* Machinery and Equipment – 10 years

Typical Structure of a Loan:

Bank – 50% – 1st Mortgage

SBA 504 – 40% – 2nd Mortgage

Borrower’s Equity – 10% *

* This is a minimum requirement – An additional 5% equity is required for a start-up business, 5% equity is also required on special purpose facilities (hotel/motels, gas stations, car washes, funeral homes, theaters, etc.) Therefore, if you have a start-up special purpose project, the borrower will need to contribute 20% equity into the project.

Start Up & Special Purpose Facility Structure:

Bank – 50% – 1st Mortgage

SBA 504 – 30% – 2nd Mortgage

Borrower’s Equity – 20%

Ineligible Purposes:

* Working Capital

* Franchise Fees

* Inventory

* Rolling Stock

Ineligible Businesses:

* Nonprofit Organizations

* Financial Institutions

* Gambling Facilities

* Real Estate Development Companies

504 Rate History


20 Year Note Rate History

2013

Month Rate
January 2.16833
February 2.24949
March 2.25964
April 2.11763
May 2.10738
June 2.49303
July 3.20269
August 3.21274
September 3.67831
October 3.42545
November 3.43549
December 3.43541

2014

Month Rate
January 3.51651
February 3.28357
March 3.26331
April 3.16225
May 3.05065
June 3.04044
July 2.91897
August 2.92905
September 2.96968
October 2.78718
November 2.84791
December 2.74666

2015

Month Rate
January 2.56458
February 2.51049
March 2.76680
April 2.55396
May 2.81760
June 3.03048
July 2.92906
August 2.87760
September 2.86828
October 2.76688
November 2.74652
December 2.86835

2016

Month Rate
January 2.82769
February 2.31051
March 2.54381
April 2.30022
May 2.31036
June 2.21908
July 2.07704
August 2.07699
September 2.06674
October 2.24946
November 2.61479
December 2.85811

2017

Month Rate
January 2.84789
February 2.86826
March 3.09120
April 2.88846
May 2.92925
June 2.85812

SBA 504-7a Loan Comparison


This will give you an overview of the SBA 504 and SBA 7(a) loan programs and compare the features of each. For more information, click here to contact a loan officer in your area.

At-A-Glance Comparison

Purchase of Real Estate – $3,000,000

SBA-504 LOAN

Bank (50%) $1,500,000
SBA 504 (40%) $1,200,000
Equity (10%) $300,000
Total $3,000,000
Fees related to the SBA 504 Debenture $39,460
Third Party Lender Fee $7,500
Total $46,960

SBA 7(a) LOAN

SBA 7(a) $2,700,000
Equity (10%) $300,000
Total $3,000,000
SBA 7(a) Guaranty Fee $73,438
Proposed Debt Service

SBA-504 LOAN

Bank $1,500,000 15 yrs @ 6% $151,896
SBA 504 $1,240,000 20 yrs @ 4.3% $92,544
Total $244,440

SBA 7(a) LOAN

SBA 7(a) $2,700,000 15 yrs @ 6% $273,420