 SBA Loan Comparison >SBA 504 Loan
The objective of the SBA 504 is to achieve community economic development by providing long-term fixed asset financing to small business concerns.
- Loan proceeds may be used to finance assets such as buildings, land and machinery with a useful life of at least 10 years. The borrower must be the user of the assets in the case of equipment, and the small business concern must occupy 51% of pre-existing purchased real estate and 60% of new construction.
- The 504 Program is an excellent venue for financing projects that involve business expansion and job creation. The objective of the SBA 504 Program is to achieve community economic development by providing long-term fixed asset financing to small business concerns. Financing is available for larger real estate projects up to $10,000,000.00. Down payment towards the purchasing of real estate can be as little as 10% to qualified borrowers.
Sterling Savings Bank has partnered with the SBA to provide a two loan financing structure.
Loan Structure
In the 504 loan structure, the small business injects at least 10% of the total funds for the project. The minimum down payment is 10% of the project costs. If the small business concern has been in business less than 2 years or if the project is for a special use facility, a minimum of 15% down payment is required. Should both of the above apply, the minimum equity injection is 20%. The SBA (via the ELCDC) provides up to 40% of the total project costs. These SBA/ELCDC funds are referred to as the debenture portion of the loan. Sterling typically provides the remaining 50% of the project costs.
Competitive Rates
Sterling Savings Bank provides competitive fixed and variable rate loans in conjunction with the fixed rate debenture funded by the SBA.
| Features |
SBA 504 Loan |
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Use of Proceeds
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Acquisition, Construction/Renovation
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Maximum Loan Amount
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$10,000,000
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Interest Rate
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Fixed or Variable
on Bank 1st
SBA 2nd – Fixed
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Maximum Loan to Value on core collateral
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90%
|
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Loan Terms
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Same as Conventional
20 Years Fully Amortized
on SBA 2nd
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Prepayment Penalties
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Varies on Bank 1st
For the First Ten Years on SBA 2nd
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Points
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Varies (call for quote)
on Bank 1st
2.45% on SBA 2nd
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Fees
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$1,250 Loan Documentation Fee
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Contact your local SBA loan office today. We’ll get you on your way to a loan that’s just your size.
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