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Finance Commercial Real Estate Purchases

The SBA-504 loan is specifically designed to help small businesses buy, construct or improve commercial and industrial buildings.

Key Advantages of SBA-504 loan over conventional business loans

  • Low down payment – the business owner invests only 10% down, borrowing up to 90% of the total financing need, thus preserving cash for the business.
  • Longer repayment terms – SBA repayment periods are longer than conventional bank loans – 20 years fully amortized for real estate loans and 10 years fully amortized for equipment loans. The small business owner’s monthly loan payment is more affordable, improving cash flow.
  • Fixed interest rate – below-market
  • Projected income consideration – CDC considers projected income of a business in addition to historical cash flows. This is particularly advantageous for growing businesses.

Secondary source of payment less critical – With the SBA-504 loan guarantee, collateral may be less critical in qualifying a borrower for a loan.

Typical Structure

A SBA-504 loan has three participants:

  • Bank – provides a first trust deed loan for at least 50% of the total project cost.
  • CDC – provides SBA-guaranteed 504 loan for up to 40% of the total project cost, or a maximum of $5 million ($5.5 million for manufacturing businesses and qualifying “green” buildings).
  • Small Business Owner – invests a down payment of at least 10%.

Qualifying Requirements

To qualify for a SBA-504 loan, a business must:

  • Be owner-operated
  • Be for-profit
  • Be organized as a sole proprietorship, corporation, partnership or limited-liability corporation (LLC)
  • Have net worth no greater than $15 million and net profit after taxes below $5 million in the last two operating years

How to Apply

Contact one of our loan officers in your area – click HERE.  They can provide a loan pre-qualification in just 24 hours.

The complete process from application submission to disbursement of funds takes approximately 45 to 60 days, depending on the complexity of the loan. CDC provides a checklist to keep the process simple for the small business owner. We will work with the owner, accountant, banker, lawyer or and do all of the analysis, packaging and SBA interfacing for the borrower.



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