SBA 504 Loan Lending Process Explained in Day to Day Language

Does the thought of choosing among different business loans keep ticking like a clock in your head? Or do you find the interest rates on long-term loans too high? If so, then you're much like other small business owners who are encumbered by the thought of a big loan.

504 Capital Corporation will let you get rid of such thoughts with its SBA 504 Loan Program. We are SBA 504 Lenders in Virginia and Maryland and are a leading Certified Development Company.

As a nonprofit SBA 504 Loan advancing company, our mission is to aid small businesses and promote economic development for all. We are financial experts, ready to make your business dreams a reality.

What is an SBA 504 Loan?

Small Business Administration (SBA) 504 Loan is a government-supported loan for small businesses. It enables small business owners to purchase real estate and other fixed property.

This 504 Loan program provides business financing and promotes business growth. Three parties are involved in the process of lending an SBA 504 Loan: a lender, the CDC and the borrower.

The lender contributes 50%, the CDC contributes 40% and the borrower contributes 10% of the total project cost. The SBA certifies the CDCs and then CDCs works on the funding of small businesses.

Who is eligible for an SBA 504 Loan?

To get an SBA 504 Loan, you must own a small business as defined by the SBA. Business owners must meet the following requirements as per SBAs requirement for 504 Loans:

  • The business must have tangible assets worth $15 million or less.
  • The business must have an average net income of $5 million or less after taxes for the previous two years.
  • The business must be for-a profit and must have an active operation. And it shouldn’t be engaged in speculation.
How to apply for an SBA 504 Loan?

To begin with the application process for an SBA 504 loan, you must identify the type of investment you want to invest in. Further, you should prepare your business records to avail of the loan.

You should look for a Certified Development Company (CDC), and apply for an SBA 504 loan with the CDC. 504 capital corporation has well-established connections with approved lenders. We will handle your entire application process for your loan.

Most often, you’ll also need to submit a statement that describes how you plan to use the loan.

What can you do from an SBA 504 Loan?

The SBA 504 loan program can be used to invest in fixed assets, like real estate and equipment. The program also covers both improvement and acquisitions. Small business owners can use the loan for the following things:

  • Purchase land or an existing building
  • Build a new amenity or renovate the existing one
  • Make site improvements
  • Buy new equipment or machinery
  • Finance soft costs and professional fees
So, if you’re looking to get funds to expand your business, 504 Capital Corporation will help you. We are a CDC in the United States operating under an Accredited Lenders Program (ALP) designation, which makes us SBA experts. Come and talk to us today at 757-623-2691 if you have any queries or visit our website at https://504capital.com/.

Location: United States

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