SBA 504 Loans for Manufacturers
Manufacturers See Significant Benefits from SBA 504 Loans
SBA 504 loans are designed to benefit small businesses of all types throughout the United States. In most cases, these loans offer up to $5 million that can be used for some very specific things. However, when it comes to manufacturers, you’ll find that the rules change a bit – manufacturing firms actually stand to gain quite a bit with these loans.
A qualifying small manufacturing company can obtain an SBA 504 loan for up to $5.5 million. That’s $500,000 more than other businesses, simply because your company focusses on manufacturing goods, rather than selling products or services.
With this one loan, you can purchase already existing buildings or construct new ones, purchase land and make improvements, purchase equipment, modernize your existing facilities, or even convert facilities or upgrade your equipment.
SBA 504 Loan Restrictions and Alternatives
While SBA 504 loans do have some incredible benefits, there are also certain restrictions on how these funds can be used. For instance, you cannot lease equipment with the loan, you can only purchase it. You also cannot use the funds as working capital. Other loans can be used for this purpose if necessary. For example, if working capital is a priority, you may want to look into getting an SBA 7(a) loan, or perhaps an SBA express loan. Like 504 loans, SBA 7(a) loans offer borrowers up to $5 million, though they do have higher interest rates. Express loans are a variant of the 7(a) program, which can be approved significantly faster and with less paperwork than a traditional 7(a) loan. These loans are offered in amounts of up to $350,000.
We’re here to help you get the commercial financing you need. Simply fill out the form below for a risk-free consultation and a free SBA loan quote!