What Is it?

• Terms:
  • 10- and 20-year terms available
• Interest Rates:
  • Above the current market for 5- and 10-year Treasury issues
  • Current rates are 4.92% for 10-year terms or 5.05% for 20-year terms
  • Totaling approximately 3% of the debt and can finance with the loan
• Down Payment:
  • Typically, only 10% of the loan’s value

Do I Qualify?

• For-profit company in the US or its territories
• Net worth of less than $15 million
• In the 2 years preceding application, average net income of less than $5 million after federal income taxes
• Be within SBA size guidelines
• Have qualified management expertise, a feasible business plan, and good character
• Ability to repay the loan
• Meet job creation requirements
• Plan to occupy at least 51% of an existing structure or 60% of a new structure
• No prior default on a federal loan
• Not engaged in:
  • Passive activities, speculative activities, lending, political/lobbying activity, or gambling activity

How Can I Use/Not Use Funds?

• Purchase or construct:
  • Existing buildings or land
  • New facilities
  • Long-term machinery or equipment

• Improve or modernize:
  • Land, streets, utilities, parking lots, landscaping, or existing facilities

• Prohibited Uses
  • Working capital or inventory
  • Consolidating, repaying, or refinancing debt
  • Speculation or investment in rental real estate
  • Purchasing and holding real estate – all real estate purchased with the loan must be utilized for business needs

How Do I Apply?

• Contact a 504-loan lender or Certified Development Company (CDC)
  • Locate a CDC
• Prepare your 504 loan authorization package
• Complete the SBA 504 loan application