“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 |
