Borrower Benefits
- Up to 90% financing on eligible projects; higher borrower contributions apply in some cases
- Competitive fixed rates on the 504 portion
- 20- and 25-year fixed-rate options for real estate
- 10 year fixed rate on fixed equipment
- Can improve cash flow
- Lower initial equity requirements on many projects
- Working capital preservation
- Fully amortizing 10-, 20- and 25-year 504 loans
- 504 financing is generally secured by the project assets; additional collateral and guarantees may be required
Lender Benefits
- Financing structures that can expand lender opportunities
- Strong collateral position with 1st lien
- A typical lender share of 50% of project costs, secured by a first lien
- Potential Community Reinvestment Act consideration, subject to applicable bank and transaction requirements
- Eligible costs for projects already underway may qualify, subject to SBA requirements
- Blended interest rate offered borrower
- Balance sheet management
Community Benefits
- 504 puts excess revenues back into the community
- 504 program strives to meet Public Policy Goals to enhance success
- The 504 program supports job creation and retention. The general project standard is one job per $95,000 guaranteed by SBA, or $150,000 for qualifying small manufacturing or energy projects; other economic development goals may also qualify.