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| The SBA 504 loan program is economic development financing specifically designed to stimulate private-sector investment in long-term fixed assets to increase productivity, create new jobs and increase the local tax base. This is done by providing long-term, low down payment, reasonably priced fixed-rate loans to businesses which have the highest probability of successfully creating new jobs and competing in the world marketplace. |
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50% bank or nonbank in 1st lien position |
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40% SBA 504 in 2nd lien position |
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10% equity injection |
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New business or special purpose building will require 15 percent
equity injection |
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New business and special purpose building will require 20 percent
equity injection |
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Long-term, fixed-rate financing. |
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20 years on real estate, 10 years on equipment |
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Low equity injection – 10 to 20 percent preserves working capital and increases return on equity. |
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