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SBA 504

Borrower Benefits:

  • Low down payments starting at 10%
  • Long amortization schedules reducing monthly payments
  • Expand your business by freeing up your cash flows
  • Many rate options, even long term fixed rates

 

Use of Proceeds:

  • Purchase, construction or renovation of owner-occupied commercial real estate
  • Refinancing of existing debt is not permitted with a 504. Please refer to SBA 7a for refinance transactions

 

Loan Structure:

  • 50% financing - First mortgage (up to $5 million)
  • 40% financing - SBA 504 second mortgage (SBA/Certified Development Corporation provides up to $2 million)
  • 10% minimum down payment by the borrower (15% in the case of special use properties)

 

Terms:

First Mortgage

  • 25 years, fully amortized
  • Fixed, floating and adjustable rates available
  • Competitive fees
  • Prepayment penalty applies & is based on various factors

Second Mortgage

  • 20 years, fully amortized
  • Fixed rate is determined at SBA-guaranteed 504 debenture sale
  • Fees set by CDC
  • Prepayment penalty for first 10 years, none after the end of year 10

 

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