SBA 504 Loans
Loans to $10,000,000
Take advantage of some of the lowest rates available in commercial finance today with a 504 loan backed by the SBA. If you’re looking to purchase, lower your current mortgage debt obligation, improve your land or buildings, or purchase equipment for current operations the SBA 504 Loan may be perfect for you.
The Peach team has the experience necessary to guide you through this real estate backed loan with ease and clarity.
What is an SBA 504 Loan?
An SBA 504 loan is a government-backed loan program designed to help small businesses finance major fixed assets, such as real estate, equipment, and other long-term investments. It is administered by the U.S. Small Business Administration (SBA) and provides businesses with long-term, fixed-rate financing for expansion and growth.
Key Features of an SBA 504 Loan:
- Loan Structure:
- A Certified Development Company (CDC) provides 40% of the total project cost, backed by the SBA.
- A bank or other private lender covers 50% of the cost.
- The borrower contributes at least 10% (this may increase to 15% or more for startups or special-purpose properties).
- Eligible Uses:
- Purchasing land or buildings.
- Constructing, renovating, or improving facilities.
- Buying large machinery or equipment.
- Refinancing eligible commercial debt (under certain conditions).
- Loan Amounts:
- CDC portion can be up to $5 million (or $5.5 million for certain industries like manufacturing or green energy).
- With bank financing included, total project costs can exceed $20 million.
- Terms & Interest Rates:
- Loan terms are typically 10, 20, or 25 years.
- Interest rates are fixed and are based on U.S. Treasury rates plus a small spread.
- Advantages:
- Low down payment (10%) helps preserve cash flow.
- Fixed interest rates provide stability.
- Long repayment terms reduce monthly payments.
- Encourages economic development and job creation.
- Who Qualifies?
- A for-profit business operating in the U.S.
- Net worth of less than $20 million.
- Average net income of less than $5 million over the past two years.
- Ability to create or retain jobs.
