SBA 7a and 504 Eligible Loan Programs
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The SBA 7a Program allows for financing of all types of business needs from purchasing real estate, fixed assets, working capital, business acquisitions and leasehold financing. The SBA 7(a) loan program highlights are
- Up to 85% Loan to Value (LTV)
- 5 and 10 Year Fixed Rate
- 25 Year Amortization
- Fully Amortized Loans with NO Balloons
- Loans up to $5 million
- Closings in as little as 60 days
- Loans may be assumed, subject to approval
The SBA 504 Program provides a method to finance real estate expansion projects through long-term, fixed-rate financing and is differentiated from the 7(a) program in that it is offered in partnership with a participating lender (bank or non-bank).” The 504 loan program consists of two loans. The first loan and lien position is offered by an authorized lending institution and the second loan or second lien position is offered by the US SBA via the efforts of a certified development company (CDC).
504 eligible project costs include;
- Land and building acquisition
- Site improvements
- Building improvements
- Professional fees, including architect, appraisal, environmental
- Other costs, including title insurance, survey, points and interest on interim loan
- Machinery and equipment acquisition
The main advantages of the SBA 504 program are as follows;
- Small equity injection, as little as 15% toward the total eligible project
- Long-term financing is available, up to 25 years on loan 1 and up to 20 years on loan 2
- Very favorable, fully amortizing fixed-rate pricing on loan 2 at market
- Most closing costs are eligible for project financing
- SBA 504 loans may be assumed
The SBA 504 loan program highlights are:
- Up to 85% financing
- Fully amortized loans with no balloons
- 5 and 10 Year Fixed Rate
- Terms to 25 years
- Loans up to $10 million
