SBA 504 Loans

SBA 504 Loan program is hands down one of the best commercial real estate loans in the industry for business owners. Primary benefits include, low down payment (10% loan to cost, 90% commercial financing) and some of the lowest fixed rates in the business. Amortization periods can be as long as 30 years as well with the SBA 504 loan.

The SBA 504 is essentially two loans, the first lien position Certified Development Corporations (CDC) or SBA piece. The CDC piece is normally fixed and amortized over 20 years. The back loan ranges in terms like any commercial mortgages, though most are amortized over 25 years (30 years is possible) with fixed periods ranging from 5 to 10 years. The bank loan covers 50% loan to value and the SBA loan covers 40% loan to value – the borrower contributes the last 10%.

The down payment is factored off of the total project cost, meaning fees like closing costs, 3rd party costs, renovation costs, etc. can be rolled into the loan and the 10% down payment is factored off that total amount- keeping valuable capital in one’s business.

SBA 504 Loan Program

Have Questions? Want to get Started? Please Contact Us: