SBA Loans

Small Business Administration Loan (SBA)
These programs are operated through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA. Although these programs are available for any individual, it gives special advantages to women and those belonging to minority groups.
Small business owners thinking of purchasing or renovating commercial real estate or purchasing equipment to grow or expand their businesses should consider the U.S. Small Business Administration’s (SBA) 504 Loan Program.
The 504 loan provides small businesses access to the same type of long-term, fixed-rate financing enjoyed by larger firms. Interest rates are equivalent to favorable bond market rates.
A 504 loan may be used to purchase fixed assets such as: land and improvements, including owner-occupied buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or to modernize, renovate or convert existing facilities; or to purchase long-term machinery and equipment with a useful life of at least 10 years. Soft costs like architectural and legal fees, environmental studies, appraisals, and interest and fees on the construction and/or interim bank financing can also be rolled into the loan. Financing for other needs such as working capital, inventory, debt consolidation or refinancing are eligible through a separate SBA 7(a) Loan Guaranty Program.
A typical 504 project is structured with fifty percent of the project costs provided through a private-sector lender. This senior loan is usually for a 10-year term at a fixed or variable rate, depending on the relationship with the lender. Forty percent of the project costs are financed with a fixed-rate debenture secured with a junior lien from a SBA Certified Development Company (CDC). The debenture is backed by a 100 percent SBA-guaranty. And the final 10 percent of the project cost is provided by the purchaser.
The low 10 percent down payment is the big attraction of this program. It is possible to require even less from the business if a city, town or the state trying to attract businesses to their community is willing to provide a small piece of the financing in a subordinate position. Because of the lower down payment required and the ability to finance the soft costs, the small business will realize upfront cash savings of approximately $100,000 on a $1 million project.
The maximum SBA debenture can be up to $2 million. Certain manufacturing entities are eligible for up to a $4 million debenture. This means that a CDC can work with you to put together financing for a $10 million project with the bank providing a $5 million first mortgage with a SBA 504 debenture of $4 million, and only 10 percent equity.

Consider the following advantages of the SBA 504 program versus conventional mortgage financing:
Advantages to the business:
Low down payment . In most cases, the company is required to inject just 10 percent of the total project cost, which includes renovations and soft costs. This allows the business to preserve cash for working capital. (Ordinarily, banks require a 20 to 30 percent down payment on the purchase price.)
Fixed rate on the SBA 504 portion. Small businesses don't have to worry about the prime lending rate going up and can calculate the exact amount of their mortgage payments for 20 years.
Long term. 504 loans are for 10 or 20 years. Because the CDC is in second lien position, the lender doing the 50 percent first lien loan is willing to lend at a longer term. Longer terms reduce monthly payments
Low interest rate. Even with fees and closing costs included in the rate, the 504 program offers a low fixed rate for a subordinate mortgage loan. The blended rate between the lender portion and the SBA’s 504 portion makes the project very affordable, particularly for small businesses.

Loan Types:
SBA Loan About to Balloon?
Refinance using our Unlimited Cash-Out Commercial Mortgage Refinance!
Cash Out Refinance Commercial Loans for Businesses
Commercial/Industrial Real Estate Financing
Purchase * Refinance * Renovate * Owner-Occupied
Existing Business Acquisition Loans
Up to 90% Financing

SBA Construction Loans
Loan Amount: $1Million up to $5
Terms: 5, 7, and 10 years
Amortization: 25 and 30 years.
Loan to Value Ratios: 75% for Most Loans

Property Types:
Single-Purpose Buildings
Gas Stations
Repair Shops
Auto Dealerships
Hotels and Motels
Apartment & Multifamily Financing Solutions
Convalescent Hospitals

Equipment Financing:
Commercial Printing and Binding Machines
Laundry/Dry Cleaning
Manufacturing Equipment
Heavy Equipment/Trucking
Medical Equipment
Diagnostic Equipment

Provide a Detailed Loan Scenario on our SBA Loan Submission Form  page and we’ll get back to you quickly.
Thank you, and we look forward to serving you now and in the future.