SBA 7(a) loans can be used for nearly any business purpose. This includes commercial owner-occupied real estate, construction or renovation for owner-users, business acquisition and start-up, refinancing for existing debt, equipment purchases, working capital and inventory.
- Competitive rates and down payments as low as 10%
- Quick approval and fast closings on loan amounts to $2 million
- Low monthly payments with up to 25-year amortizations available
As a non-profit set up to contribute to its community's economic development, a Certified Development Company (CDC) works with the SBA and private sector lenders to provide financing to small businesses. The 504 CDC Program provides growing businesses with long-term, fixed-rate financing for major fixed assets such as land and buildings.
SBA 504 loans are typically secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100% SBA-guaranteed debenture) covering up to 40% of the cost, and a contribution of at least 10% equity from the small business being helped.
- Must be used for fixed asset projects such as purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities.
- Can also be used for modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.
- Cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.