SBA 504 Benefits for Your Small Business
We have the small business loans that can put your business at an advantage.
Benefits of SBA 504
- Long-term, fixed-rate financing
- 20 years on real estate, 10 years on equipment
- Low equity injection – 10 to 20 percent preserves working capital
- Short-term assets remain lien-free to support other financing needs
- Flexible ownership options allow borrowers to choose the ownership options that work best for them
- Excellent loan-to-value – typically 50 percent or less
- Alleviates legal lending limit concerns
- Pricing flexibility on first mortgage portion
- First mortgage portion may be sold on secondary market
What’s the difference between SBA 504 and conventional bank loans?
Differences for borrowers
SBA 504 loans give you 20-year full-term, fixed-rate financing for lower, more predictable monthly payments. That makes your small business more affordable.
Lower Down Payment
With the SBA 504 program, a borrower can put as little as 10 to 20 percent down.
Differences for lenders
Credit Risk Mitigation
SBA 504 loans allow lenders to have senior lien position and a loan-to-value ratio of around 50 percent, which lowers collateral risk.
Management of Lending Limits
Overall lending limits can be well-managed by banks with SBA 504 loans. Smaller banks can handle larger projects while all banks can limit their exposure.
Increase in Customers
Lenders can strengthen core earnings and receive additional income from new customers with SBA 504 loans, as well as gain several new long-term banking relationships.
Are you eligible for an SBA 504 loan?
Check your SBA loan eligibility.