What Is the SBA 504 Maximum Loan Amount?
The SBA 504 maximum loan amount is currently set at $5 million in lifetime dollars. However, if your business is a small manufacturer, you can borrow up to $5.5 million in lifetime dollars. It should also be noted that if you decide to embark on energy-related projects that fall under the “go gree
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The SBA 504 maximum loan amount is currently set at $5 million in lifetime dollars. However, if your business is a small manufacturer, you can borrow up to $5.5 million in lifetime dollars. It should also be noted that if you decide to embark on energy-related projects that fall under the “go green” heading, you can borrow substantially more. While all projects are capped at $5 million, you can ultimately borrow up to $16.5 million in lifetime dollars.
Note that the SBA does not limit the amount you can borrow from a conventional lender. Banks and other lenders are free to contribute as much as you qualify to borrow. However, the SBA/CDC’s contribution is limited to the aforementioned amounts. In most situations, this comes to 40% of the loan’s value (up to the contribution cap that applies to your situation).
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Related Questions
What is the maximum loan amount for an SBA 504 loan?
The SBA 504 maximum loan amount is currently set at $5 million in lifetime dollars. However, if your business is a small manufacturer, you can borrow up to $5.5 million in lifetime dollars. It should also be noted that if you decide to embark on energy-related projects that fall under the “go green” heading, you can borrow substantially more. While all projects are capped at $5 million, you can ultimately borrow up to $16.5 million in lifetime dollars.
Source: https://sba504.loans/sba-504-blog/what-is-the-sba-504-maximum-loan-amount
What are the eligibility requirements for an SBA 504 loan?
In order to take out an SBA 504 loan, your business must meet the following eligibility requirements:
- Your business must be a for-profit organization.
- Your business must meet current SBA size standards.
- Your business’ net worth cannot exceed $15 million.
- Your business cannot earn 1/3 or more of its income from packaging SBA loans.
- Your business must earn an average of $5 million or less per year (after taxes, and only for the preceding two years).
- Your business cannot be engaged in any sort of passive or speculative activities.
Note that additional requirements may be placed by CDCs or conventional lenders. You can find a full list of eligibility requirements and other important information with the SBA here.
What are the advantages of an SBA 504 loan?
The SBA 504 loan program offers several advantages to businesses in need of purchasing fixed assets. These include:
- Lower interest rates than 7(a) loans and express loans
- Lower down payment requirements than 7(a) loans and express loans
- Long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization
- Fully amortized without a balloon payment
- Terms for SBA 504 financing are typically 10, 15, or 20 years
For more information, please visit https://sba504.loans/sba-504-blog/what-is-the-sba-504-loan and https://www.sba.gov/offices/headquarters/ofa/resources/4049.
What types of businesses are eligible for an SBA 504 loan?
Businesses that are for-profit, small businesses with a net worth below $15 million, and that create or maintain jobs, and occupy the property purchased with the loan are eligible for an SBA 504 loan. No non-profits, real estate investors, or religious institutions will qualify. Investors must also have good credit and a financial history.
How long does it take to get approved for an SBA 504 loan?
The length of time required for an SBA 504 loan to be approved 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.
According to SBA Express Loan Closing Times Compared to Other SBA Loans, the estimated closing time for an SBA 504 loan is 45 days, though this process can significantly longer, depending on the individual circumstances.