SBA 504 Loans: An Overview
All About SBA 504 Loans
A Small Business Administration (SBA) 504 loan is one of the best ways to finance your small business. Because SBA 504 loans are guaranteed by a federal agency, lenders participating in the program are able to offer loans to small business owners that come with flexible terms and low interest rates.
SBA 504 Loans – Who is Eligible?
SBA 504 loans are provided to businesses that are making a profit. In addition, a company needs to have a written feasible business plan and be operated with relevant management expertise. Here are some other requirements:
• Your business’s tangible net worth must be below $15 million.
• Your business’s average net income for the preceding two years must be less than $5 million after taxes.
• You must prove that you can repay the loan on time from your projected operating cash flow.
What Can SBA 504 Loans be Used for?
Your loan funds may be used for the following purposes:
• Purchase of land.
• Acquisition of existing buildings.
• Purchase of long-term equipment.
• Modernization, renovation or conversion of existing facilities.
• Improvements to existing facilities, such as utilities, grading, landscaping, street improvements, and parking lots.
• Building of new facilities.
What Can SBA 504 Loans Not be Used for?
• Purchase of inventory.
• Working capital.
• Consolidation, repayment or refinancing of debt (although you may refinance some debt associated with buying or renovating equipment or facilities.
• Investment in rental real estate.
How Much Can I Borrow and on What Terms?
Maximum loan amounts depend upon how the funds will be used. If you think the SBA 504 Loan Program might be right for you, talk to Artemis Commercial Capital. We will tell you if you qualify and assist you with the application process. And, if we determine that you don’t qualify for an SBA 504 loan, we have other financial options available for you. So, let us show you how we can help.