There are a variety of loans available to small businesses in the United States, but an SBA 504 loan is one of the best loan products available to help small businesses purchase property. 504 Capital, an SBA 504 lender in North Carolina and Virginia, talks about the top reasons to take up an SBA 504 loan.
What is an SBA 504 Loan?
An SBA 504 or a CDC 504 loan is a small business loan designed to help businesses purchase their property and equipment. These loans are provided by Certified Development Companies (CDC) and certified/monitored by the Small Business Administration (SBA).
An SBA/CDC 504 loan can be used for large purchases that will help the business grow. Because of this, there are certain criteria you need to meet and certain purchases that are and are not allowed. You can read more about what you can do with your 504 loan on our website.
Why Choose an SBA 504 Loan?
SBA 504 loans are one of the best loans available to small businesses. The main reasons for this are because of the long amortization period, the high financing ability, the low down payment, low fixed interest rate, and the high chance of qualification.
SBA 504 loans have a long amortization period. This means that you have a longer time frame to pay off the loan than conventional loans. This also allows you to have smaller payment amounts because you will be paying off the loan over the course of 10, 20, or even 25 years.
High Financing Ability
With a conventional loan or an SBA 7a loan, the loan institution will only give you 65-85% of the total project amount. With an SBA 504 loan, you can get up to 90% financing on your project. Meaning you could only have to pay around 10% of the final project cost out of your own pocket.
Low Down Payment
Conventional loans require 25-40% as a down payment for your loan In contrast, CDC 504 loans require as little as 10% of the financing amount. This is a huge plus for people who may just be starting out and are building capital.
Unlike conventional loans, an SBA 504 loan is made with a fixed interest rate that is below the market. This allows you to spend less money over the course of the financing period.
High Chance of Qualification
Finally, with an SBA 504 loan, more small businesses qualify. There are some requirements that a small business must meet in order to be granted this loan, but many small businesses will qualify for a CDC 504 loan.
SBA Lender in Virginia and North Carolina
The future of your business can hang on if you get an affordable loan or not. At 504 Capital we understand and take the time to get to know your business and its needs. We are an SBA 504 Virginia lender as well as an SBA lender in North Carolina.
So, if you are looking for an SBA CDC lender in North Carolina, 504 Capital is your go-to. We have helped hundreds of small businesses grow. Let us help you. Visit our website or call us (757) 623-2691, to see how you can qualify for an SBA/CDC 504 loan today!