The SBA 504 Loan
An SBA 504 loan is a great option for all borrowers who can qualify. What is an SBA 504 loan? The SBA 504 program is a group effort where the Small Business Administration teams up with a commercial lender, such as a national bank, credit union, or a non-bank lender to fund the project costs of a loan. This program is a great option because it has better rates and saves the borrower loads of money.
The SBA 504 can fund up to 90% of project costs on loans that go up to $12.5 million. The break down for a $12.5 million dollar project with 10% down from the borrower would go as follows:
-Borrower would put down $1.25 million
-SBA would take a second lien on the property, pay $5 million, with a fixed for life of loan interest rate
-The Bank would take a first lien position on the property, pay $6.25 million, with a fixed interest rate for 5-10 years.
Here at First Capital Commercial, we specialize in the SBA 504 product. We would be happy to help you get involved with this product and get the loan rates you deserve.