SBA 504 Loans for Retail Stores
While malls might be declining in patronage, that cannot be said for small, local retailers. In fact, small specialty real stores have grown by 1% in the last few years, and are expected to generate $41 billion in revenue in 2018.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!SBA 504 Loans Support Retail Stores
While malls might be declining in patronage, that cannot be said for small, local retailers. In fact, small specialty real stores have grown by 1% in the last few years, and are expected to generate $41 billion in revenue in 2018.
Despite the opportunities in the specialty retail market, it can be difficult to get financing for store owners who want to expand their businesses. However, SBA 504 loans can help. These loans offer up to $5 million in funding, and can be used for some pretty specific needs. For instance, you can use the funds to purchase real estate and then build your new store, or to purchase an existing building. You can also use them to buy fixed equipment, as fixtures, signage, and the like can cost tens of thousands of dollars.
While you cannot use 504 loan funds as working capital, they remain one of the most potent tools available for retail store owners looking to grow their businesses.
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!
Related Questions
What are the eligibility requirements for an SBA 504 loan for a retail store?
In order to qualify for an SBA 504 loan for a retail store, you must have less than $6 million in annual sales and show a legitimate financial need. You must also be paid up on other federal loans. SBA 504 loan payment terms for retail stores can last up to 25 years if you’re buying a building, up to 10 years for equipment purchases, and you can get seven years for working capital.
For more information, please visit SBA 504 Loans for Retail Stores and Eligible and Ineligible Industries for SBA 7(a) Loans.
What are the advantages of an SBA 504 loan for a retail store?
The SBA 504 loan offers up to $5 million in funding, and can be used for specific needs such as purchasing real estate and building a new store, or purchasing an existing building. It can also be used to buy fixed equipment, as fixtures, signage, and the like can cost tens of thousands of dollars. Additionally, SBA 504 loans have slightly lower interest rates than SBA 7(a) loans and can finance commercial real estate construction/acquisition deals up to $5.5 million.
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What are the disadvantages of an SBA 504 loan for a retail store?
The disadvantages of an SBA 504 loan for a retail store include:
How long does it take to get an SBA 504 loan for a retail store?
The length of time required for an SBA 504 loan to be approved for a retail store can vary drastically, but averages between 60 and 90 days. With that being said, it may take up to six months in some situations. There is no hard and fast rule here, and each situation will be unique. Factors that go into determining the length of time to loan approval include:
- Your ability to gather all required information
- Your ability to satisfy all lender requirements for information and proof of income
- SBA approval (up to 7 days)
- Due diligence (2 to 3 weeks)
- Closing (up to 14 days)
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!
What documents are required to apply for an SBA 504 loan for a retail store?
When applying for a 504 loan, you’ll need to provide the CDC and your lender with a very wide range of documentation. We have included the most commonly required documents below.
- Business tax returns for the previous three years
- Personal tax returns for the previous three years
- Personal history statement
- Personal financial statement
- Personal budget analysis
- Business financial statements for the previous three years
- Business debt schedule
- If you are applying for a loan for a hotel or motel, you will need:
- Revenue and expenses breakdown for the past year (month to month)
- Occupancy percentage and average daily rate information for the previous year (month to month)
- Occupancy percentage and average daily rate for the area
- Your hotel projection worksheet
- Interim financial statement (signed and dated, and including balance sheet and income statement dated within the previous two months)
- Accounts receivable aging (dated within the previous two months)
- Accounts payable aging (dated within the previous two months)
- Complete business plan
- One year of financial projections with assumptions
- Purchase agreement
- Written estimate from a contractor if the loan is for construction
- If this is a franchise, you will need a letter of intent from the franchisor and a FUOC and franchise agreement
- If you are buying another business, also include:
- The business owner’s tax returns for the previous three years
- Interim finance statement dated within the last 60 days
- Signed purchase agreement with cost breakdown, amendments, etc.
- If you are using gift funds, you will need to provide a gift letter
- Previous government financing schedule
- Environmental impact questionnaire
- Application certification an authorization
- Documents pertaining to the ownership of other businesses and their finances (if applicable)
- Copy of loan agreement and SBA authorization if you have another SBA loan
- If you are refinancing a loan, you will need:
- Copy of the original debt documentation
- Your original purchase agreement, including settlement sheet,