The U.S. Small Business Administration established the 504 loan to help businesses purchase owner-occupied commercial real estate and equipment while retaining working capital. The SBA 504 loan puts financing within reach for small businesses through low down payments and long-term, low, fixed interest rates. And it reduces the risk to lenders through a shared financing structure.
The Loan Structure
Business Finance Capital (BFC) partners with lenders to provide up to 90 percent financing to businesses for the purchase of owner-occupied commercial real estate and equipment. BFC provides up to 40 percent of the financing and the lender typically provides 50 percent. Business owners pay as little as 10 percent down.
Borrower / Business Owner pays 10% of project costs using cash, prepaid project-related expenses; equity of 15-20 percent is required for start-up businesses and purchase of single-use properties such as hotels, car washes, and gas stations.
BFC / SBA 504 REAL (40%)
BFC makes an SBA-guaranteed loan of up to 40% of project costs, plus SBA loan fees, and is secured by a 2nd Deed of Trust; the total loan amount depends on the type of business and project. See our team of experts at BFC.
A bank, credit union or other non-bank lender makes a commercial loan, typically 50% of total project costs, which is secured by a 1st Deed of Trust.
Helping Small Business Think Big
BFC is Southern California’s leading SBA 504 loan Program expert, with over 20 years in the industry. We help California businesses grow by facilitating the premier tool for Real Estate financing—the SBA’s 504 loan.