Savvy small business owners seek out SBA 504 loans to take advantage of many benefits that help guarantee success and financial stability. Likewise, knowledgeable lenders also want to be part of the process.
The first step for either party is finding an expert Certified Development Company (CDC) like 504 Capital Corporation that helps connect small business owners with experienced lending officers.
An SBA 504 loan 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 the small business owner’s contribution.
504 Capital has relationships with a variety of reputable lending partners. When you worked with us, you will be assured that we have vetted each of our lenders and selected the best options that offer great interest rates and attractive term lengths. Lenders appreciate working with a CDC on SBA 504 loans because it helps them support small businesses, often in the same area, which contributes to the local economy.
Do you want to learn more about who we partner with?
Types of SBA 504 loan lenders
- Banks
- Credit unions
- Commercial lending companies
- Private lenders
504 Capital assists small businesses with determining if they are eligible for the SBA 504 loan and matches them with the best lender for their needs. The process is often much easier and faster than trying to get approved for a conventional loan, even if a small business applies through their own bank.
We can guarantee our lending partners will offer very competitive interest rates. Other advantages of an SBA 504 loan though 504 Capital include:
- SBA 504 loans are the only loans in the country backed by the U.S. government.
- In 2018, a 25-year fixed term was added to the financing options along with 10- and 20-year loans. This allows small business borrowers to have lower monthly payments and additional cash flow.
- For existing business going into a multi-purpose building, 10% down is all that is needed to get started. This helps them protect working capital, especially crucial during a crisis, when many haven’t been able to operate at normal capacity and have decreased revenue.
Are you interested in becoming a lender, or would you like to hear more about the SBA 504 loan process? 504 Capital can help. To learn more about getting paired with our top-notch lending partners, call 504 Capital at 757-623-2691. Click to read about becoming one of our preferred lending partners, assisting small business and bolstering the economy.
