What Is The 504 Loan Program
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504 loans
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What is the 504 loan program?
The 504 loan program supplies long-term, fixed rate funding for significant fixed properties that promote organization development and task creation.
504 loans are offered through Certified Development Companies (CDCs), SBA's community-based not-for-profit partners who promote financial advancement within their communities. CDCs are certified and regulated by SBA.
The optimum loan quantity for a 504 loan is $5.5 million.
Am I qualified?
To be qualified for a 504 loan, your organization needs to:
- Operate as a for-profit company in the United States or its ownerships.
- Have a concrete net worth of less than $20 million.
- Have a typical earnings of less than $6.5 million after federal income taxes for the 2 years preceding your application
Other general eligibility requirements consist of falling within SBA size standards, having actually qualified management competence, a possible service strategy, great character and the ability to repay the loan.
Loans can not be made to services participated in not-for-profit, passive, or speculative activities. For additional details on eligibility criteria and loan application requirements, small companies and lending institutions are encouraged to contact a Qualified Development Company in their area.
How do I use a 504 loan?
A 504 loan can be used for a variety of possessions that promote business growth and task development. These include the purchase or building of:
- Existing structures or land.
- New centers.
- Long-term equipment and devices with a beneficial remaining life of a minimum of ten years, including project-related AI-supported devices or equipment for production items.
- Consolidating financial obligation under the conditions listed in 13 CFR 120.882, paragraph (e) and.
- Repaying or refinancing financial obligation specified as "qualified debt" under 13 CFR 120.882, paragraph (g)
Or the enhancement or modernization of:
- Land, streets, energies, parking area and landscaping.
- Existing centers
A 504 loan can not be utilized for:
- Working capital or stock.
- Consolidating, paying back or re-financing debt that does not meet the meaning of "certified financial obligation" under 13 CFR 120.882, paragraphs (e) and (g).
- Speculation or financial investment in rental realty.
The financing of AI-related operating capital, intellectual residential or commercial property, or seeking advice from services soft costs
What do I need to apply?
504 loans are available solely through Certified Development Companies (CDCs). Find a CDC in your location to ensure you are dealing with a qualified lending institution. CDCs are distinctively qualified to comprehend 504 loan program regulations, and will assist you navigate the lender channels to produce your project funding.
Find a CDC near you
Find Certified Development Companies (CDCs) to issue 504 loans.
How do I pay back my 504 loan?
Active 504 loans
Loan payment terms differ according to a number of elements. Borrowers with active 504 loans can pay through the Central Servicing Agent, usually by ACH month-to-month draws. Payments can also be made by wire or check.