1 What is the 504 Loan Program?
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    504 loans

    Content

    What is the 504 loan program?

    The 504 loan program supplies long-lasting, set rate funding for major fixed possessions that promote service development and task development.

    504 loans are offered through Certified Development Companies (CDCs), SBA's community-based not-for-profit partners who promote financial advancement within their neighborhoods. CDCs are accredited and controlled by SBA.

    The maximum loan quantity for a 504 loan is $5.5 million.

    Am I qualified?

    To be eligible for a 504 loan, your service must:

    - Operate as a for-profit company in the United States or its ownerships.
  • Have a concrete net worth of less than $20 million.
  • Have a typical net income of less than $6.5 million after federal earnings taxes for the 2 years preceding your application

    Other basic eligibility requirements consist of falling within SBA size guidelines, having actually certified management proficiency, a possible company plan, great character and the capability to repay the loan.

    Loans can not be made to organizations participated in not-for-profit, passive, or speculative activities. For extra details on eligibility requirements and loan application requirements, small companies and loan providers are motivated to contact a Licensed Development Company in their location.

    How do I use a 504 loan?

    A 504 loan can be used for a variety of assets that promote company growth and job creation. These consist of the purchase or building and construction of:

    - Existing structures or land.
  • New facilities.
  • Long-term equipment and devices with a helpful staying life of a minimum of 10 years, including project-related AI-supported devices or machinery for manufacturing items.
  • Consolidating debt under the conditions noted in 13 CFR 120.882, paragraph (e) and.
  • Repaying or re-financing financial obligation defined as "competent debt" under 13 CFR 120.882, paragraph (g)

    Or the improvement or modernization of:

    - Land, streets, energies, car park and landscaping.
  • Existing facilities

    A 504 loan can not be used for:

    - Working capital or stock.
  • Consolidating, repaying or re-financing debt that does not meet the definition of "competent financial obligation" under 13 CFR 120.882, paragraphs (e) and (g).
  • Speculation or financial investment in rental property. The funding of AI-related working capital, intellectual residential or commercial property, or seeking advice from services soft expenses

    What do I require to use?

    504 loans are readily available exclusively through Certified Development Companies (CDCs). Find a CDC in your area to ensure you are handling a qualified loan provider. CDCs are uniquely certified to understand 504 loan program policies, and will assist you navigate the lending institution channels to create your job funding.

    Find a CDC near you

    Find Certified Development Companies (CDCs) licensed to issue 504 loans.

    How do I repay my 504 loan?

    Active 504 loans

    Loan repayment terms differ according to a number of factors. Borrowers with active 504 loans can pay through the Central Servicing Agent, usually by ACH month-to-month draws. Payments can also be made by wire or check.