SBA 540 Loan Program

SBA’s 504 loan program is a long-term financing tool designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

Proceeds from 504 loans must be used for fixed asset projects, such as:

The purchase of land, including existing buildings
The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
The construction of new facilities or modernizing, renovating or converting existing facilities
The purchase of long-term machinery and equipment
Temporarily until September 27, 2011, refinancing of fixed assets without expansion and financing of eligible business expenses.

Typically, a 504 project includes three elements:

a loan (or first mortgage) secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a second mortgage secured with a junior lien from an SBA Certified Development Company (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business borrower.

To determine your eligibility for the SBA 504 loan program or for more information, please submit your information and a Registration Specialist will contact you.