The U.S. Small Business Administration (SBA), is an independent agency of the federal government that is dedicated to helping entrepreneurs and small business owners get easy access to financing so they can build or expand their businesses. Created in 1953, the SBA is devoted to stimulating local, regional, and national economies through the creation of small businesses that generate revenue and create jobs.
Through SBA 504 loans, businesses can receive low, fixed-rate loans with very generous terms to be used for the purchase of land or an existing building, for building a new facility or renovating an existing structure, to make site improvements to existing properties, and/or to buy machinery or equipment.
The beauty of SBA 504 loans is that they provide small businesses with a number of very attractive benefits over conventional business loans offered by other financial institutions such as banks and credit unions. For one thing, SBA 504 loans, in most cases, only require a 10% down payment from the borrower. The SBA considered providing small business loans with no down payment, but realized that borrowers are more invested in the success of their business if they have a monetary stake in it.
SBA 504 loans also come with longer repayment terms than average business loans. Borrowers can take up to 10 years to repay the purchase of machinery or equipment, and 20 to 25 years to repay the purchase of purchasing, renovating, or construction commercial buildings. Plus, there are no balloon payments at the end of the term.
Entrepreneurs and small business owners can apply for SBA 504 loans through what is called a Certified Development Company (CDC). CDCs are experts in servicing SBA 504 loans, they find the financing for you, and they handle all of the paperwork in the processing closing of your loan.
504 Capital Corporation is a non-profit CDC that was founded in 1983 with the specific purpose of helping entrepreneurs and small businesses turn their dreams into realities. We have existing relationships with qualified lenders so we can find the money your business needs to get off the ground or to expand your current operations. We are also your single point of contact throughout the entire process, so if you have any questions or concerns, we’re available to provide you with answers to your questions and peace of mind about your loan. We’re here to serve you.
