SBA 504 Loans for Restaurants
With growth over 4% in the past three years, and over $300 billion in revenue in 2018 alone, the restaurant industry is booming. And, that means that it could be an amazing time to expand your restaurant. Of course, you’ll need funding if you want to make your eatery all it can be. That’s where an
Better Financing Starts with More Options$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get QuotesSBA 504 Loans Help Bring Restaurants to Life
With growth over 4% in the past three years, and over $300 billion in revenue in 2018 alone, the restaurant industry is booming. And, that means that it could be an amazing time to expand your restaurant. Of course, you’ll need funding if you want to make your eatery all it can be. That’s where an SBA 504 loan can come in.
Common Uses for SBA 504 Loans
In general, SBA 504 loans are designed to help you purchase and improve real estate. You can also use the funds to design and construct your building, and even to purchase the equipment that you’ll need. Ovens, stoves, fryers and the like cost hundreds of thousands of dollars combined, and SBA 504 loan can give you up to $5 million to spend on building your business.
However, if you need working capital to tide you over until the restaurant can turn a profit, you’ll need supplemental funding. An SBA 7(a) loan might be a good idea, but there are other choices, too. These include SBA express loans, SBA microloans, and, of course, good old conventional business loans.
SBA Loans for Restaurants Compared
Related Questions
What are the eligibility requirements for an SBA 504 loan for a restaurant?
The eligibility requirements for an SBA 504 loan for a restaurant are the same as for any other business. To qualify, you must be a for-profit business, have a tangible net worth of less than $15 million, and have an average net income of less than $5 million over the past two years. Additionally, you must be able to demonstrate that you have the ability to repay the loan. You must also be able to provide collateral for the loan, such as real estate or equipment.
For more information on the eligibility requirements for an SBA 504 loan, please visit https://sba504.loans/sba-504-blog/what-is-the-sba-504-loan/.
What are the benefits of an SBA 504 loan for a restaurant?
An SBA 504 loan can provide up to $5 million to help you purchase and improve real estate, design and construct your building, and purchase the equipment you need for your restaurant. This loan can help you get the funding you need to expand your restaurant and make it all it can be.
The SBA 504 loan also offers a number of other benefits, including:
- Low down payment: The SBA 504 loan requires only 10% down, which is much lower than conventional loans.
- Fixed interest rates: The SBA 504 loan offers fixed interest rates, which can help you budget and plan for the future.
- Long repayment terms: The SBA 504 loan offers up to 25 years of repayment, which can help you manage your cash flow.
What are the steps to apply for an SBA 504 loan for a restaurant?
The steps to apply for an SBA 504 loan for a restaurant are similar to the steps for any other business. The first step is to verify eligibility. You must make sure that you meet the eligibility requirements for the program. This includes having a good credit score, not defaulting on student loans, and not owning too many assets. The next step is to check your credit score. The SBA does not have any credit requirements, but the lender you work with will. You will then need to find a lender or a Certified Development Company (CDC) in your area that offers 504 loans. After that, you will need to get prequalified. To do this, the CDC will need three years of personal and business tax returns, interim financial documents, and a personal financial statement. Once you have been prequalified, you can decide on what you are purchasing and complete the application. The application can be downloaded from the SBA as a PDF file. You will also need to provide your creditworthiness, business’s eligibility for the 504 loan program, and your business’s current level of indebtedness. Finally, you will need to find a lender to approve the loan.
What are the repayment terms for an SBA 504 loan for a restaurant?
The repayment terms for an SBA 504 loan for a restaurant depend on the loan amount and the type of loan. Generally, the loan term is 10 or 20 years, with a fixed interest rate. The loan amount can range from $125,000 to $5 million, and the interest rate is based on the current market rate. The loan is typically amortized over the loan term, with a balloon payment due at the end of the term.
For more information, please visit https://sba504.loans/sba-504-blog/what-is-the-sba-504-loan.
What are the maximum loan amounts for an SBA 504 loan for a restaurant?
The maximum loan amount for an SBA 504 loan for a restaurant is up to $5 million. This loan can be used to purchase and improve real estate, design and construct a building, and purchase equipment.
For more information, please visit SBA 504 Loans for Restaurants.