The SBA Loan Experts® is not associated with SBA.gov and is a private business providing Consulting Services for Small Businesses.

|

1844-SBA4BIZ
1844-722-4249

504 loans

Long-term, fixed-rate financing for big fixed assets up to $5 million.

Content

What is the 504 loan program?
Am I eligible?
How do I use a 504 loan?
What do I need to apply?
How do I pay back my 504 loan?
Existing borrowers

What is the 504 loan program?

The CDC/504 Loan Program offers up to $5 million in long-term, fixed-rate financing for substantial fixed assets that support business development and employment creation.

Certified Development Companies (CDCs), the SBA’s community-based partners who govern NGOs and encourage economic development in their communities, offer 504 loans. The Small Business Administration certifies and regulates CDCs.

Am I eligible?

In order to pass the eligibility criteria for a 504 loan, your company must satisfy the following requirements:

  • In the US and its territories, operate as a for-profit corporation.
  • Have a total value of less than $15 million.
  • For the two years before your application, have an average net income of less than $5 million after federal income taxes.


Other basic qualifying requirements include meeting SBA size restrictions, possessing competent management knowledge, having a viable company strategy, having excellent character, and the ability to repay the loan.

Businesses engaged in nonprofit, passive, or speculative operations are not eligible for loans. Small companies and lenders should contact a Certified Development Company in their area for more information on eligibility criteria and loan application requirements.

How do I use a 504 loan?

A 504 loan can be used to fund a variety of assets that help businesses grow and create jobs. 

Among these are the acquisition or building of:

  • Existing buildings or property
  • The expansion of existing facilities
  • Machines and tools that will last a long time


Alternatively, the enhancement or modernization of:

  • Land, streets, utilities, parking spaces, and landscaping are all part of the project.
  • Existing infrastructure.


The following items are not eligible for a 504 loan:

  • Inventory or working capital.
  • Debt consolidation, repayment, or refinancing.
  • Investing in rental real estate or speculating on it.

What do I need to apply?

Only Certified Development Companies are eligible for 504 financings (CDCs). To begin, locate a CDC in your area to guarantee you’re dealing with a reputable lender.

Then, utilizing our 504 Authorization File Library to locate the papers you will have to submit a request for your 504 CDC loan, and start preparing and assembling your 504 loan authorization package.

How do I pay back my 504 loan?

The length of time it takes to repay a loan depends on a number of factors:

Repayment terms 

  • Both 10- and 20-year maturity terms are available.

Interest rates 

  • For 5-year and 10-year U.S. Treasury issues, the rate is tied to an increment over the prevailing market rate.

  • The rate may be funded with the loan if it sums up about 3% of the debt.

Existing borrowers

Existing borrowers can use the SBA Capital Access Financial System (or CAFS) to track the progress of their loans. Get information on how to set up an account.

Copyrights 2022. OWMS, All rights reserved. | Powered by Dymentions