504 Capital Corporation is a non-profit CDC organization that was founded in 1983 with the mission to assist small businesses and help them grow, promoting strong overall economic prosperity. We work with the SBA and CDC lenders to connect them with small business owners looking for financing through CDC business loans. We handle all the paperwork, walk borrower’s through every step of the way, and answer any questions. We also operate under an Accredited Lenders Program (ALP) designation, which means we have increased authority to process, close, and service SBA loans, and we can even expedite the process to help push a borrower’s application through more quickly.
For small businesses, SBA 504 loans can be used for the purchase of land or an existing building for constructing a new facility or renovating an existing one, to make site improvements, to finance soft costs and professional fees, and/or to buy long-term machinery or equipment. Benefits include:
- Easy Financing.
While conventional loans generally required a 20-30% down payment, an SBA 504 Loan can provide up to 90% loan-to-cost financing through a 40% contribution from the SBA and 50% coming from a certified lender.
- Better Rates.
Many conventional commercial loans provide variable interest rates, which can be extremely tough on small business under unfavorable market conditions. A CDC loan not only provides a low, fixed rate, it offers the ability to get long-term financing
- Longer Terms.
Repayment schedules for CDC loans are generally longer than traditional loans, offering terms from 10 to 25 years. They also do not require any balloon payments at the end of the term.
For lenders looking to add CDC small business financing to their portfolio of products they offer, we bring the borrowers to them. Again, as the intermediary between lenders and borrowers, we handle all of the loan processing, so a financial institution such as a traditional bank or credit union can offer SBA 504 loans without needed to hire and train additional staff to originate loans or service them. It’s an easy way bring in additional revenue without needing to worry about loan defaults since the loans are guaranteed by the SBA.
In other words, SBA 504 loans are a great deal for both lenders and borrowers. As SBA loan specialists, 504 Capital Corporation is ready to handle all of the details to make the process smooth and easy on both sides. Lenders, contact us, and let’s discuss how adding SBA 504 loans to your portfolio is a simple way to increase your revenues with no additional hard costs. Borrowers, we can find you the money you need to take your business idea to reality and we’ll walk you through the entire process.
