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| Borrowers | : | Eligibility Criteria | : | Collateral | : | Special Notes | : | Fees & Payments | : | FAQs | : | Maximum Debenture | : | Time Line |
Fees and Payments
All of the fees on the SBA 504 loan are added to the loan amount so that you can amortize their cost over the loan term. You will sign a note for the 40% of project cost plus the fees.
Payments on the SBA 504 loan are made by ACH debit to the borrowers designated checking account on the first of each month after the loan closes. Payments on the 504 loan are separate from your payments on the 50% first mortgage loan
Frequently Asked Questions
What is the term of the SBA 504 loan?
- 10 or 20 years for real estate
- 10 years for equipment with a life expectancy of 10 years or more
- SBA loans are fully amortized and have a fixed interest rate
Can the property be owned personally and leased to the business?
- Yes, you can pay yourelf the loan payments plus taxes, insurance and maintenance
- You can hold title to the property in a trust, corporation, as an individual or others matters, but anyone owning 20% or more must be a personal guarantor on the SBA loan
What will be used as collateral?
- The SBA loan will be secured by a second deed of trust on the subject property
- Generally the project will be the collateral. In some cases machinery, equipment and fixtures will be used along with leases assignments, or may take a junior position onother property. Occasionally, junior lien on an individual's personal residence may be required
- Personal guarantees will be required from any individuals with 20% or more ownership