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What is the 504 Loan Program?
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504 loans
Content
What is the 504 loan program?
The 504 loan program offers long-lasting, set rate financing for major set possessions that promote business growth and job development.
504 loans are readily available through Certified Development Companies (CDCs), SBA's community-based nonprofit partners who promote financial development within their neighborhoods. CDCs are certified and managed by SBA.
The optimum loan amount for a 504 loan is $5.5 million.
Am I qualified?
To be eligible for a 504 loan, your service needs to:
- Operate as a for-profit business in the United States or its belongings. - Have a concrete net worth of less than $20 million.
- Have an average earnings of less than $6.5 million after federal earnings taxes for the 2 years preceding your application
Other general eligibility standards consist of falling within SBA size standards, having certified management competence, a possible business plan, good character and the capability to pay back the loan.
Loans can not be made to organizations participated in nonprofit, passive, or speculative activities. For extra info on eligibility requirements and loan application requirements, small organizations and loan providers are motivated to contact a Licensed Development Company in their location.
How do I use a 504 loan?
A 504 loan can be used for a series of possessions that promote service development and job development. These include the purchase or construction of:
- Existing buildings or land. - New centers.
- Long-term equipment and equipment with a helpful staying life of a minimum of ten years, including project-related AI-supported devices or machinery for manufacturing products.
- Consolidating debt under the conditions noted in 13 CFR 120.882, paragraph (e) and.
- Repaying or refinancing financial obligation specified as "certified debt" under 13 CFR 120.882, paragraph (g)
Or the enhancement or modernization of:
- Land, streets, utilities, parking lots and landscaping. - Existing facilities
A 504 loan can not be used for:
- Working capital or inventory. - Consolidating, paying back or refinancing financial obligation that does not meet the meaning of "certified debt" under 13 CFR 120.882, paragraphs (e) and (g).
- Speculation or financial investment in rental real estate.
The financing of AI-related operating capital, intellectual residential or commercial property, or speaking with services soft expenses
What do I need to use?
504 loans are offered specifically through Certified Development Companies (CDCs). Find a CDC in your location to guarantee you are dealing with a qualified loan provider. CDCs are distinctively qualified to understand 504 loan program regulations, and will help you browse the lending institution channels to create your task funding.
Find a CDC near you
Find Certified Development Companies (CDCs) authorized to release 504 loans.
How do I repay my 504 loan?
Active 504 loans
Loan payment terms differ according to several factors. Borrowers with active 504 loans can make payments through the Central Servicing Agent, typically by ACH monthly draws. Payments can also be made by wire or check.