FAQ

The program provides permanent financing for eligible real estate that a business will occupy and fixed equipment with a useful remaining life of at least ten years.

Specifically, the program can be used to:

• Purchase land and an existing building.
• Purchase land and construct a new building.
• Renovate or expand the business's existing building.
• Purchase eligible machinery and equipment.
• Finance eligible fixed assets acquired as part of a business acquisition.
• Refinance qualifying fixed-asset debt.
• Include eligible business expenses when permitted by SBA refinancing rules.
• Refinance qualifying debt and expand the building.

Ordinary working capital, inventory, and goodwill are not eligible 504 project costs. Refinancing has separate eligibility requirements.

The lender typically provides 50% of project financing and Premier Capital provides up to 40% through the 504 program, leaving a borrower contribution of at least 10%. New businesses and projects involving limited or special-purpose properties generally require 15% or 20% borrower equity.

Please view the SBA 504 Process page or contact Miranda Ray at 317.613.3501 and Emmanuel Merchiers at 317.613.3503 to discuss a project with your lender.

Complete information and early coordination help keep the loan package moving. Timing depends on the project, underwriting, the appraisal, environmental review, and closing requirements. Bring Premier Capital into the process early so we can coordinate a realistic schedule with your lender.

No. Premier Capital is a private nonprofit Certified Development Company authorized by the SBA to deliver and administer the 504 program. Established in 1976, we serve businesses in Indiana and eligible Kentucky communities.

Possibly. Eligible project expenses incurred before the SBA application, and qualifying interim or bridge financing, may be included under current SBA rules. Contact Premier Capital before making further commitments so we can review the costs, financing, and required documentation.

The limits apply to the 504 portion, not the total project cost. Standard projects generally have a $5 million aggregate outstanding 504 limit for the business and its affiliates. Qualifying small manufacturers and eligible energy projects may receive up to $5.5 million per project. Premier Capital will review existing SBA financing, affiliates, and project eligibility to determine available financing.

Contact Premier Capital's servicing team early for an estimated payoff and the required notice and funding deadlines. A 504 payoff includes the outstanding principal, applicable accrued interest and fees, and any prepayment premium required by the note. The final payoff amount and payment date must be confirmed before you send funds.

Your loan documents determine the insurance coverage and endorsements required for your project. Evidence of required property insurance must be provided and kept current for the life of the loan. Premier Capital Corporation and/or the U.S. Small Business Administration should be identified as required by your loan documents, using the following office address:

Premier Capital Corporation and/or
U.S. Small Business Administration
300 N. Meridian St., Suite 990
Indianapolis, IN 46204

Please have your insurance agent send the required evidence of coverage to our servicing team. Building, liability, workers' compensation, and other coverage may apply to your property and operating company.

Flood insurance must be maintained when required by applicable SBA rules and your loan documents. If the flood designation changes, please contact our servicing team at 317.613.3500 to review the requirement before changing or cancelling coverage.

A financial statement is a written report that reflects the financial condition of an individual or business. Business financial statements include a balance sheet and income statement (profit and loss statement). Year-end refers to the fiscal year-end of the operating small business.

Statements must meet the reporting requirements in your loan documents. Contact our servicing team if you are unsure of the required format.

Current balance or address change

To request a current balance or update your address, contact our servicing team or call 317.613.3500. Use our secure document upload for financial statements and sensitive documents.

Qualifying business expansion may meet an SBA public-policy goal, which can provide an alternative to the project's standard job-creation test, subject to the CDC's portfolio requirements. Other SBA eligibility and credit standards still apply. Contact us to discuss your project.

Benefits can include a low down payment, longer terms, and fixed-rate financing on the 504 portion. Most projects require at least 10% borrower equity, with higher requirements in some cases. Depending on the assets financed, 10-, 20-, and 25-year 504 maturities are available.

The lender typically finances 50% of project costs in a first-lien position, while the 504 program provides up to 40%. This structure can help a lender serve borrowers seeking long-term fixed-asset financing with a lower initial borrower contribution. Use our comparison calculator to explore an illustrative structure.

Qualifying business expansion may meet an SBA public-policy goal, which can provide an alternative to the project's standard job-creation test, subject to the CDC's portfolio requirements. Other SBA eligibility and credit standards still apply. Contact us to discuss your project.

Yes. Eligible real estate and equipment can be included in a project or financed through separate 504 loans when appropriate. Equipment must have a useful remaining life of at least ten years. The loan structure and maturity depend on the assets being financed and current SBA requirements.

Yes. An Eligible Passive Company may own eligible project property and lease it to an eligible Operating Company when the ownership, lease, occupancy, size, and guaranty requirements are met. Premier Capital can help review the proposed structure.

At least 10% is required for most 504 projects. The minimum generally increases to 15% for a new business or a limited or special-purpose property, and to 20% when both apply. A new business generally means a business operating for two years or less at approval; some changes of ownership also qualify. Additional equity may be required based on credit considerations.

It may be possible. Borrowed contributions and seller financing must meet SBA requirements, including applicable subordination, repayment, and cash-flow conditions. Have Premier Capital review the proposed terms before relying on seller financing as part of your contribution.

Possibly. Eligible project expenses incurred before the SBA application, and qualifying interim or bridge financing, may be included under current SBA rules. Contact Premier Capital before making further commitments so we can review the costs, financing, and required documentation.

Yes, eligible equity in land and buildings that are part of the project may count toward the required contribution, subject to valuation and documentation requirements. Equity in qualifying equipment may also count in eligible refinancing transactions.

A discount from an appraised value is not automatically an eligible cash contribution. Premier Capital will review the acquisition cost, timing, appraisal, and applicable SBA contribution rules when determining eligible equity.

Land that is part of the project may count toward your contribution. Under current SBA policy, land acquired less than two years before application is generally valued at cost; land held for two years or more may be valued at fair market value supported by an independent appraisal meeting SBA requirements. Eligible buildings and improvements may also be included.

Fees can include SBA guaranty and servicing fees, CDC processing and closing costs, funding and underwriting charges, and a third-party lender participation fee. Some eligible costs can be financed. SBA fees and available waivers depend on the approval fiscal year and project type, and other costs vary by transaction. Contact Premier Capital for a current written estimate.

Legal, appraisal, environmental, title, recording, and other project-specific closing costs may apply. Premier Capital will identify expected costs and which items may be financed in your project estimate.

An early payoff may include a declining prepayment premium under your loan note. A voluntary 504 prepayment generally pays the loan in full, rather than making an extra partial principal payment. Contact our servicing team for the applicable premium schedule, payoff amount, and required timing before arranging payment.

An assumption requires SBA's prior written approval and review of the proposed borrower and transaction. Release of an existing borrower's or guarantor's obligations is not automatic. Contact our servicing team before agreeing to a sale or transfer.

Owners with at least 20% direct or indirect ownership generally must provide full guarantees, and other guarantees may be required. Special rules apply to spouses, trusts, entity owners, Eligible Passive Companies, and Operating Companies. Premier Capital will confirm the required guarantors for your ownership structure.

No. Guarantors do not have to be located in Indiana, but they must satisfy current SBA citizenship, residency, and guaranty requirements.

The borrower must meet the lender's, Premier Capital's, and SBA's credit standards and demonstrate the ability to repay. Current SBA 504 policy generally requires debt-service coverage of at least 1.15:1, with additional analysis for projection-based projects. Credit history, management experience, equity, collateral, liquidity, and industry conditions are also reviewed.

Eligible land, buildings, construction or renovations, long-term machinery and equipment, and directly related professional and soft costs may be included. Qualifying debt may also be refinanced under the SBA's separate refinancing rules.

Inventory and goodwill are not ordinary 504 project costs. An SBA 7(a) loan or another financing source may be appropriate for eligible working-capital or business-acquisition needs, while the 504 program finances eligible fixed assets. Some eligible business expenses may be included in a qualifying 504 refinance.

Franchises may qualify when the brand is listed in the SBA Franchise Directory where required and the business, agreement, and transaction meet current SBA requirements. Directory listing is not approval of an individual loan.

No. The business must be eligible, operate for profit, meet SBA size standards, demonstrate repayment ability, and use the funds for an eligible project in Premier Capital's service area. Current citizenship and residency rules apply to all direct and indirect owners and SBA-required guarantors. Under SBA's alternative size standard, the business and its affiliates may have no more than $20 million tangible net worth and no more than $6.5 million average after-federal-tax net income for the preceding two completed fiscal years, excluding carry-over losses. Some applicants qualify using their industry size standard instead. Examples of ineligible businesses include nonprofit borrowers, passive investment or speculative businesses, businesses primarily engaged in lending subject to limited exceptions, pyramid distribution schemes, and businesses engaged in activities prohibited by applicable law. Other restrictions, including federal-debt and prior-loss rules, may apply. See our Who/What Qualifies page or contact us for a review.

Hotels may qualify if the business, occupancy model, management, and project meet SBA and lender requirements. Hotels are generally considered special-purpose properties, so a higher borrower contribution may apply. A franchise flag is not a universal SBA requirement; if franchised, current franchise rules also apply.

Gas-station projects require review of franchise and supply agreements, title restrictions, and environmental conditions. Restrictions that impair ownership, use, or the collateral's value may need to be removed or amended. Ask Premier Capital to review the actual documents before assuming a project qualifies.

Eligibility depends on the property, contract, title, existing debt, and proposed 504 structure. Premier Capital will review whether the transaction can qualify as an eligible purchase, borrower contribution, or refinancing under current SBA rules.

Yes, qualifying fixed-asset debt may be refinanced with or without expansion under current SBA rules. The debt, collateral, ownership, occupancy, use of proceeds, and project structure must meet the applicable requirements. Some qualifying refinance transactions may include eligible business expenses. Contact Premier Capital for a review of your existing financing.