What You Need to Know About SBA 504 Loans
S mall enterprises are the backbone of any economy and need adequate financing to grow and expand. Unfortunately, traditional bank small business loans often charge high-interest rates and stringent terms, making it challenging for them to access the financing they need. This is where the SBA 504 loan program comes in. Let's understand how it works. Three Parties Involved in SBA 504 Loans Three parties are involved in the SBA 504 loan process: the borrower, an SBA-approved lender, and a Certified Development Company (CDC) . The first party involved in the SBA 504 loan process is the borrower. This is the small business owner seeking financing to purchase fixed assets such as real estate, equipment, or machinery. The borrower is responsible for providing 10% of the loan amount as a down payment and securing the remaining 90% through the SBA 504 loan program. The SBA-approved lender is the second party involved in the SBA 504 loan process. The lender is responsible for providing