Qualifications:

Credit: The borrower(s) must meet both the lenders and the SBA’s credit standards.

Eligibility: The company and their individual owners (those with at least 20% ownership) must be eligible for the SBA 504 program. Below are common eligibility requirements:

  • The project must be located in Indiana or Kentucky
  • The owners must be U.S. citizens or have a permanent resident status
  • The company must be a for-profit company
  • The project must be for owner occupied commercial real estate and/or fixed equipment that has a useful life of at least ten years
  • For existing property the borrower must occupy at least 51% of the building
  • For new construction the borrower must initially occupy 60% of the building and 80% long term
  • The company must not have a tangible net worth in excess of $15 million and not exceed a 2-year average net income after Federal income tax of $5 million.
  • If a franchise, the franchise must be approved by the SBA
  • Not be an ineligible company as listed below:
    • Non-profit companies
    • Real estate development or other speculative business
    • Finance companies e.g., banks, check cashing or finance companies
    • Pyramid sales distributions
    • Businesses deriving more than 1/3 of gross revenues from legal gambling
    • Businesses that limit membership for reasons other than capacity
    • Businesses or owners that have defaulted on a government loane.g., student loan
    • Refinancing under most circumstances

 

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