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

Lending products available with approved credit.

504 Rate History


20 Year Note Rate History

2020

Month Rate
January 2.36123
February 2.10736
March 1.51808
April 1.67056
May 1.39601
June 1.23325
July 1.05033
August .91764
September 1.07039
October 1.10090
December 1.13145

2021

Month Rate
January 1.20277
February 1.26377
March 1.54858
April 1.56902
May 1.39601
June 1.31461
September 1.40620
October 1.56884
November 1.57906
December 1.68071

2022

Month Rate
January 1.87372
February 2.25968
March 2.57423
April 3.43547
May 3.88065
June 3.95163
July 3.87069
August 3.70886
September 4.16385
October 4.96167
November 5.05266
December 4.62866

2023

Month Rate
January 4.88083
February 4.57813
March 4.93163
April 4.54767
May
June
July
August
September
October
November
December

 

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