SBA 504 Loans

 SBA 504 Loan Guide

Get an SBA 504 Loan for Your Small Business

If you’re looking for a way to purchase real estate, heavy equipment, or other fixed assets for your small business, an SBA 504 loan could be a fantastic solution. In 2017, the SBA guaranteed approximately $5 billion in 504 loans, making it one of the fastest growing loan programs the SBA has to offer. Here are a few facts about the SBA 504 loan:

  • Loan Size: The SBA 504 loan can provide up to $5 million for small businesses, and up to $5.5 million for small manufacturing companies

  • Loan Term: 20 years for land and buildings, 10 years for heavy equipment

  • Interest Rates: Vary, but current maximum interest rates for the CDC portion of an SBA 504 loan are between 2.08 and 2.18% above the relevant U.S. Treasury Index (5-year index is used for 10-year loans, while the 10-year index is used for 20-year loans).

  • Loan Use: Land, real estate, heavy equipment, and other fixed assets. 504 loans are not allowed for working capital

  • Credit Score: No official minimum score set by the SBA, but lenders typically require scores of 680+

  • Down Payments: Minimum 10% down payment required for most borrowers

  • Timing: Typically takes between 65 to 75 days to close on real estate loans, heavy equipment loans may close faster

SBA 504 Loan Terms and Requirements

If you want an SBA 504 loan, your business will have to meet certain requirements, including:

  • Must be within the SBA size limit for your specific industry

  • Cannot be involved in lending, real estate investing, gambling, speculation, or illegal businesses

  • Your business typically must demonstrate that it will create jobs in the area in which it is located


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