Posts tagged SBA 504 CDC
Are There Prepayment Penalties with an SBA 504 Loan?

Consumers have received greater protection against prepayment penalties on mortgage loans in the past few years. However, the same protections do not extend to small business owners. The simple answer to the question of whether or not there are prepayment penalties with an SBA 504 loan is yes, there are. However, it’s not actually quite so clear cut.

Read More
Can Franchises Benefit from an SBA 504 Loan?

It may seem like franchises would not be a good fit for an SBA loan, but that is actually not the case. Many franchises can qualify for an SBA loan, primarily 7(a) and 504/CDC loans. With that being said, not all franchises will qualify.

Read More
Can a Non-Citizen Apply for an SBA 504 Loan?

The answer to the question posed above is both; “it depends.” While non-citizens can apply for an SBA 504 loan, as well as for other SBA loan options, it is not a clear-cut, straightforward situation. In short, only some non-citizens are eligible to take out an SBA-backed business loan.

Read More
How Can I Improve My Business Credit for an SBA 504 Loan Application?

As we’ve mentioned elsewhere on this site, you should have a credit score of 680 or higher if you want to apply for a 504 loan. That can be challenging for small businesses. Thankfully, there are ways that you can improve your credit and make your business a better funding candidate while reducing the level of risk for lenders.

Read More
What is the Required Debt Service Coverage Ratio (DSCR) for SBA 504 Loans?

In order get approved for an SBA 504 loan, you must prove your company’s ability to repay it. A business plan and the necessary financial documents play a role in that. However, most underwriters will use a debt service coverage ratio, or DSCR, as a major element in their decision-making process.

Read More
How Is the SBA 504 Loan Structured?

It’s important to realize the difference between a 504 loan and many other types of loans. For instance, with a home loan, your funds go specifically towards the purchase of the house and land on which it sits. It may also be used to pay some associated costs, and there are loan options that will allow you to finance needed repairs and renovations into the project, too. In contrast, 504 loans are structured differently— and, in this article, we’ll discuss how.

Read More
What Is a Certified Development Company and Why Are They Involved in 504 Loans?

According to the SBA, “A Certified Development Company (CDC) is a nonprofit organization that promotes economic development within its community through 504 loans. CDCs are certified and regulated by the SBA, and work with SBA and participating lenders (typically banks) to provide financing to small businesses, which in turn accomplishes the goal of community economic development.”

Read More