SBA 504 Loans in North Carolina

SBA 504 Loan Rates, Requirements and Terms in North Carolina

Considering the continuation of competitive interest rates, now is the time to learn more about the SBA CDC 504 loan program in North Carolina.

It makes financial sense to start a business while locking down a current fixed rate as low as 2.7% for a 10-year loan, 2.99% for a 20-year or 3.04% for 25 years. Paying less interest, one of the many perks of the SBA 504 loan, will set you up for success and profitability. Small business borrowers can expect to have lower monthly payments and additional cash flow.

SBA CDC 504 Loan Program in North Carolina

So how do you apply for the SBA CDC loan program in North Carolina?

You can locate a Certified Development Company in the North Carolina area by consulting a list of companies available on the SBA website and searchable by zip code. A CDC is eligible to offer loans in the state it was chartered.

Once you find a CDC you’d like to work with, schedule an appointment to find out more about the program, the advantages and eligibility.

The SBA CDC loan program in North Carolina has three sources of funding. A commercial, third-party lender holds the first mortgage position and typically offers up to 50 percent of the project cost. The SBA 504 loan-backed portion from a CDC will act as a second mortgage, financing up to 40 percent of eligible project costs. The remaining 10 percent (an equity investment) will be the small business owner’s contribution.

SBA 504 loans can be used for large investments such as purchasing equipment or machinery; purchasing existing buildings; purchasing land and land improvements (street grading, utilities, parking lots); building new facilities; renovating, remodeling, or converting existing facilities; or refinancing existing debt that’s connected with an expansion of your business.

CDC 504 loan benefits, other than low interest rates, include:
  • Generous term lengths. In 2018, a 25-year fixed term was added to the financing options along with 10- and 20-year loans.
  • Financing for up to 80 to 90 percent of project costs.
  • Minimal down payments. In most cases, the borrower is required to invest only 10 percent of the total project cost, which includes renovations and soft costs. This allows the business to preserve cash for working capital.

Requirements for the SBA CDC loan program in North Carolina

To get approved for a CDC 504 loan, you must qualify as a small business. Figuring out if you meet the key criteria is a crucial first step, and it’s important to note that a small business can actually be much larger than what many people imagine when they think of a more modest company.

To be considered a small business, and therefore eligible for an SBA 504 loan, you must own a small business as defined by the SBA and meet the following qualifications:
  • Company average net income of less than $5 million after taxes for the previous 2 years.
  • Tangible net worth less than $15 million.
To learn more and start the application process, contact a reputable certified development company in North Carolina and invest in your future, today.

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