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Small Business Loan Eligibility Criteria

Eligibility Criteria For an SBA 504 Commercial Real Estate Loan

Whether a small family owned business or a multi-entity corporation, 99% of all U.S. businesses are considered a small business. Chances are excellent that you are a candidate for an SBA 504 loan. To qualify, your business must be:

  • Owner-operated small business; it can be associated to an eligible Franchise
  • Formed for tax purposes as a “For profit” business
  • Organized as a sole proprietorship, corporation, partnership or limited-liability corporation (LLC).
  • Organized as a US entity sole proprietorship, corporation, partnership or limited-liability corporation (LLC)
  • The applicant business represents a tangible net worth no greater than $15 million and average net profit after taxes below $5 million in the last two operating years
  • The real estate for purchase or constructed has to be majority owner occupied
  • Credit history demonstrates applicant(s) ability to successfully manage payments on debt obligations
  • Applicant has access to the necessary 10% project down payment
  • If applicant owns building and seeking funds to expand; can use property’s existing equity to meet 10% investment
  • Equipment being financed must have a minimum 10-year economic life and value at the cost of acquiring to qualify

Eligibility Criteria For A Loan To Start, Buy Or Expand A Business

  • Located in California, Nevada or Arizona (Please note that loans under $50,000 are only available in Southern California)
  • No bankruptcy within the last 4 years
  • Not currently behind on any existing debt
  • Have the capacity to meet living expenses and repay loan
  • Owner(s) must personally guarantee the loan

Start-up businesses must have:

  • 20% injection downpayment from the owner
  • Business Plan and reasonable financial projections (click here for templates)
  • Management or industry experience preferred

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