Business Finance Capital, a California-based Certified Development Company (CDC) administers SBA 504 Loans on behalf of the Small Business Administration. The loan is particularly attractive to small business owners because it features a below market, long term FIXED rate and only requires a 10% down payment.

The requirements to qualify for an SBA 504 Loan starts with one basic tenant: You need to have a for-profit business based in the US.

 

If that’s you, that’s a good start! Additional requirements are as followed:

  • 51% Occupancy: The applicant must occupy at minimum, 51% of the property being purchased with funds provided by the loan. For new construction, applicants must occupy at least 60% of the property.

Loan funds can be used to:

  • Purchase land
  • Purchase existing buildings
  • Purchase long-term machinery and equipment
  • Purchase improvements (including grading, street improvements, utilities, parking lots and landscaping) or Build new facilities or modernize, renovate or convert existing facilities.

A 504 Loan cannot be used for:

  • Working capital or inventory
  • Speculation or investment in rental real estate.

What are the amounts and repayment terms?

Maximum loan amounts are determined by how they’ll be used ­– if they support goals associated with job creation, public policy or small manufacturing. The loan terms also vary. For land and buildings, the loan term is 20 years; it’s a 10-year term for machinery and equipment.

To learn more about the SBA 504 Loan, your qualifications, and what it means to have a business associated with job creation and helping your local economy, give us a call (1-800-SBA-REAL) and talk to one of our SBA 504 Loan experts today.