Small Business Loan 504
If you own a small business, or you're trying to start a business, you know how difficult it can be to obtain the financing you need to grow and prosper. Working with the Small Business Administration (SBA), we are able to offer loans to meet your specific needs. Imagine the possibilities with a SBA loan from State Bank of Countryside!
The 504 loan program has long-term, fixed-rate financing and is used to acquire fixed assets for expansion or modernization. Use proceeds to purchase long-term machinery, existing buildings, or land; make land improvements; build new facilities or modernize, renovate or convert existing ones. NOTE: The 504 Program cannot be used for working capital or inventory.
| Source of Funds | Existing Business AND Multi-Purpose Facility | Start up Business AND Single Purpose Facility |
|---|---|---|
| SBC Loan | Up to 50% of project cost | Up to 50% of project cost |
| SBA 504 Loan (through CDC) | Up to 40% of project cost | Up to 30% of project cost |
| Borrower's Equity | At least 10% of project cost | At least 20% of project cost |
- Summary
How the Program Works:
Every 504 project requires the participation of a Certified Development Company (CDC). CDCs are authorized by SBA to provide second-lien financing behind a first-mortgage lender, such as State Bank of Countryside. The following are typical structures for projects utilizing the 504 program.
Source of Funds Existing Business AND
Multi-Purpose FacilityStart up Business AND
Single Purpose FacilitySBC Loan Up to 50% of project cost Up to 50% of project cost SBA 504 Loan (through CDC) Up to 40% of project cost Up to 30% of project cost Borrower's Equity At least 10% of project cost At least 20% of project cost (Note: SBA considers a business less than two years old to be a start up.)
Use of Companion SBA 7(a) Loans:
The 504 and 7(a) programs can be used in conjunction. For example, a 504 loan can be used to construct a building, and a companion 7(a) can be submitted simultaneously to finance machinery and equipment, inventory, working capital, etc.
- Terms of Loans
SBA Loans feature fully amortizing notes with no balloons.
Other Requirements:
1. As a general rule, loans for business purposes and real estate acquisitions require an equity injection depending on the asset being financed.
2. Applicants for SBA loans must be citizens of the United States, or have legal permanent residence status. Also, the owners/principals of the business must be of good character. Any prior arrests or criminal charges must be disclosed.
3. The SBA charges a guaranty fee that must be paid at the time the loan is funded. However, the guaranty fee can be paid from loan proceeds.
- How to Apply
How to Apply:
1. Gather basic information concerning your business and loan request. A list of minimum required information is provided on the tab labeled Terms of Loans.
2. Contact Raj Badri at 708-485-9981 to schedule an appointment to discuss your loan request.
