- Small Business
When a business customer arrives looking for a loan to purchase real estate, machinery or equipment but the company doesn’t have the usual 20-30% equity for the project, don’t turn your customer away! You can still do the deal with the help of an SBA 504 loan where projects can be funded with often as little as 10% equity injection from the borrower.
If you have an on-going relationship with the borrower and the project makes sense but there are lending limits to consider, or perhaps a credit enhancement is required to get your loan past the committee, or the customer only wants to pledge the asset being financed, then consider the SBA 504 loan. When you need to manage liquidity, SBA 504 loans allow the bank to advance only 50% of a project cost – and even this 50% can be liquid it needed – providing excellent flexibility for managing your balance sheet.
- To preserve their capital, in most cases only 10% down will be needed
- A fixed interest rate, for the entire term of the SBA 504
- A long term of 10 or 20 years on real estate and 10 years on equipment
- A low interest rate the SBA loan(debenture) is sold on the bond market and is guaranteed by the Federal goverment
Eligible Uses of an SBA 504 Loan:
- Acquisition of vacant land
- Building construction
- Acquisition of existing buildings
- Major renovations and/or additions to existing building
- Marine facility acquisition, including fishing vessels and commercial boats
- Purchases of capital equipment, including heavy machinery
If you are a broker and have a customer looking to purchase a building for their business, you have come to the right place!
- Will your customer occupy at least 51% of the building?
- Does your customer want a smaller down payment?
- Does fixed rate 20 year term sound good?
- If you answered “YES” to any of the above questions you need to contact us for more details.
We will walk you through step by step on the best way for you and your customer and we will even set up a time to come personally talk with you both. CONGRATULATIONS!! You took the first step in helping your customer get a better loan, that shows you have their best interest at heart and so do we.