SBA 504 Loans

Loans are given through private-sector lenders.

• The SBA DOES NOT have GRANTS for small businesses.
• Interest rates are at or above typical rates for commercial loans.
• SBA Loans offer longer amortization rates than most commercial loans:
• Working Capital loans: up to 7 years
• Fixed asset loans: up to 25 years

Eligibility Criteria
The Small Business Applicant must:

• Be an operating business, be organized “for profit” (legal entity- corporation, partnership, sole proprietor, limited liability and located within the U.S.
• All owners with 20% ownership or more must give a personal guarantee.
• Meet SBA size standards which are:
• The small business applicant and its affiliates must have:
• A tangible net worth of $15 million or less and
• An average net income after federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years of $5.0 million or less.
• Meet job creation goals of the program (currently 1 job for every $65,000 of the SBA debenture)
• Meet Occupancy Requirements which are:
• If the project is to purchase an existing building, the small business MUST occupy at least 51%
• If the project is to construct a new building, the small business must occupy 60% of the rentable space
• Multiple borrowers may partner to occupy the required percentage
• Unused space can be leased out with leasehold income considered in determining repayment ability