July 30, 2010 | Home

504 Loan

The 504 Loan Program is an excellent venue for financing projects that involve business expansion and job creation. The main objective for the SBA 504 Program is to assist with community economic development by providing long-term fixed asset financing to small business owners. In the case of real estate financing, the borrower must occupy at least 51% of pre-existing purchased real estate and 60% of new construction. Financing is available for larger real estate projects up to $7,000,000.00, with  down payments as little as 10% to qualified borrowers. These loans cannot be used for refinancing. 

Loan Structure

The typical 504 loan is broken in to three parts: 10% down from the borrower; a 50% first deed of trust loan from Western National Bank; and a 40% second deed of trust offered by the SBA/CDC. If the small business concern has been in business less than 2 years or if the project is for a special use facility, a minimum of 15% down payment is required. In either case, the SBA 504 offers great long term fixed interest rate financing, while allowing you to finance a large portion of your closing costs, keeping your down payment to a minimum. Other terms include:

Loan Size

• $250,000 to $7 Million

Advance Rates

• General purpose real estate - up to 90%
• Special purpose real estate - up to 85%

Maximum Term (Fully Amortized)

• Bank first trust deed - 25 years
• SBA second trust deed - 20 years

Member FDIC | Equal Housing Lender