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“When you’re running a practice and buying a building at the same time, you need people you can trust..”
Deb Telles
Cardiovascular Associates -
“The bank and CDC were amazing. Their teamwork exceeded my expectations and they bought into our dreams..”
Salvador Garcia
Owner
Graphicom Digital -
“With interest rates low and building costs rising, the timing seemed right to buy our own building..”
Randy Mintz
Owner
Z Sports -
“I partnered with CDC because they have the expertise to provide immediate answers for my clients..”
Richard Willner
Business Community Capital -
“The people at CDC held our hands as we walked through the SBA process..”
Gurchuran “Gogy” Sandher
Owner
Saagar Fine Cuisine -
“My bank suggested SBA-504 financing because of the low down-payment, which allowed me to save my cash for the business..”
Jim Tankersley
Owner
Laser-Tronics -
“I use the 504 program because it’s good for my clients. I use CDC Small Business Finance because they’re reliable and provide excellent service..”
Lan Ward
Senior Vice President
California Bank & Trust -
“CDC was the key to us getting what we consider a ‘killer’ deal. CDC staff were honest, straightforward and always quick to respond..”
Randy Ling Tan
General Manager
G.L. Food Wholesales -
“CDC Small Business Finance provided a turnkey solution and timely service..”
Brett Noss
Chief Financial Officer
Advantage Mailing -
“We were confident in our business plan and put our faith in the high-energy people at CDC..”
Kayla Sharp
Chief Executive Officer
Spectre Industries
SBA-504 Loan Made Easy
Here is an example breakdown of a SBA-504 loan showing the bank’s 1st mortgage (Lender Loan) at 50% of the total project, the SBA-504 loan (2nd mortgage) at 40% and the small business owner injection of 10%. The rates used are examples only.
To provide a more thorough and valuable service to your clients, CDC offers a Customized Lease vs. Buy Comparison. We have Loan Experts in your area who can develop a custom analysis for you and then help close your deal.
Lenders often consider the SBA-7a loan along with the 504 program. This side-by-side comparison illustrates the differences:
SBA 504 LOAN
(Commercial Real Estate & Equipment) |
SBA 7(a) LOAN(General Purpose) |
|
|---|---|---|
| ELIGIBLE BUSINESS SIZE | • Business net worth not to exceed $15 million • Average net profit after taxes for 2 consecutive years not to exceed $5 million |
• Determined by industry type • Annual sales not to exceed range of $750,000 to $33.5 million for retail, service and agriculture • Number of employees not to exceed range of 100 to 1,000 for wholesale and manufacturing |
| LOAN STRUCTURE | • 50% bank loan • 40% CDC loan • 10% borrower down payment |
• Loan structure negotiable; dependent on risk • 10% down payment (minimum) |
| PROCEEDS USE | • Purchase existing building • Land acquisition and ground-up construction (can include soft cost development fees) • Expansion of existing building • Finance building improvements • Purchase equipment |
• Expand, acquire or start a business • Purchase or construct real estate • Refinance existing business debt • Buy equipment • Provide working capital • Construct leasehold improvements • Purchase inventory |
| PROGRAM REQUIREMENTS | • 51% owner occupancy for existing building • 60% owner occupancy for new construction • Equipment must have minimum 10-year economic life |
• 51% owner occupancy for existing building • 60% owner occupancy for new construction • All assets financed must be used to the direct benefit of the business |
| COLLATERAL | • Generally, project assets being financed are used as collateral • Personal guaranties of the principal owners of 20% or more ownership are required |
• Subject assets acquired by loan proceeds • Pledge of personal residence unless bank can justify why unnecessary • Personal guaranties of the principal owners of 20% or more ownership are required |
| FEES | • Fees are financed in the 504 loan • Fees are negotiated for the 50% bank loan • Servicing fee (lowest allowed by SBA) for CDC plus a legal review fee |
• Fees can be financed in the 7a loan • Fees vary with the size of loan paired with 504 loan • Additional .25% charged on any loan portion above $1 million |
