There Are Many Ways To Use An SBA 504 Loan
An SBA 504 loan can help almost any small business secure the funding it needs for crucial resources. It’s time to consider this key to success that can put your business on the path to greatness.
The first step of the process is finding a Certified Development Company (CDC) like 504 Capital Corporation that can help connect you with an experienced lending officer. We will assist you in determining if you are eligible for the loan and how you can put it to good use to ensure your business is prosperous far into the future.
A project financed through 504 Capital 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 your small business owner contribution.
Do I Qualify For An SBA 504 Loan?
A CDC can help you determine if you are eligible for an SBA 504 Loan. Typically, you must meet criteria such as owning a for-profit business in the United States, having tangible net worth less than $15 million, earning an average net income of $5 million or less, and occupying at least 51% of the space you intend to purchase.
In order to qualify you will also likely have to prove that you intend to use your financing for an eligible purpose.
Ways To Use An SBA 504 Loan
So, once you are approved, how exactly can you use your financing? What is an eligible purpose for an SBA 504 loan? Traditionally, you can use the funds toward ways to improve your small business. This can include investments such as the purchase of land, property and heavy equipment.
This can include:
- 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
- Refinancing existing debt that’s connected with an expansion of your business
How Do I Find The Best SBA 504 Loan Lender?
504 Capital Corporation finances projects for small businesses located in Virginia, North Carolina, Maryland, D.C., West Virginia and select counties in Pennsylvania. We can help you achieve great things by matching you with the perfect lender. Whether you have a one-of-a-kind business plan or are hoping to fulfill your dreams of expansion, we can help.
If you believe you are eligible for an SBA 504 loan, consider taking advantage of the benefits to start funding your project’s success. 504 Capital Corporation is a top SBA 504 lender that has loaned more than $250 million to small business owners. If you have questions or would like to learn more, give us a call or visit 504Capital.com today.