What is the 504 Loan Program?
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    504 loans

    Content

    What is the 504 loan program?

    The 504 loan program provides long-term, fixed rate funding for significant fixed assets that promote organization development and task creation.

    504 loans are readily available through Certified Development Companies (CDCs), SBA's community-based nonprofit partners who promote economic advancement within their neighborhoods. CDCs are certified and managed by SBA.

    The maximum loan quantity for a 504 loan is $5.5 million.

    Am I eligible?

    To be qualified for a 504 loan, your organization should:

    - Operate as a for-profit business in the United States or its belongings.
  • Have a concrete net worth of less than $20 million.
  • Have a typical earnings of less than $6.5 million after federal income taxes for the 2 years preceding your application

    Other general eligibility requirements consist of falling within SBA size guidelines, having actually certified management know-how, a practical business strategy, good character and the capability to pay back the loan.

    Loans can not be made to businesses taken part in not-for-profit, passive, or speculative activities. For additional details on eligibility criteria and loan application requirements, little organizations and lending institutions are motivated to contact a Qualified Development Company in their area.

    How do I use a 504 loan?

    A 504 loan can be used for a series of possessions that promote service growth and job creation. These include the purchase or building and construction of:

    - Existing buildings or land.
  • New facilities.
  • Long-term equipment and devices with a useful remaining life of a minimum of 10 years, including project-related AI-supported devices or machinery for manufacturing items.
  • Consolidating debt under the conditions listed in 13 CFR 120.882, paragraph (e) and.
  • Repaying or refinancing debt defined as "competent debt" under 13 CFR 120.882, paragraph (g)

    Or the enhancement or modernization of:

    - Land, streets, energies, parking lots and landscaping.
  • Existing centers

    A 504 loan can not be used for:

    - Working capital or stock.
  • Consolidating, repaying or refinancing financial obligation that does not fulfill the meaning of "competent financial obligation" under 13 CFR 120.882, paragraphs (e) and (g).
  • Speculation or financial investment in rental realty. The funding of AI-related working capital, intellectual residential or commercial property, or speaking with services soft costs

    What do I require to apply?

    504 loans are offered exclusively through Certified Development Companies (CDCs). Find a CDC in your area to ensure you are dealing with a certified lender. CDCs are distinctively certified to comprehend 504 loan program regulations, and will assist you browse the lender channels to develop your job financing.

    Find a CDC near you

    Find Certified Development Companies (CDCs) authorized to issue 504 loans.

    How do I pay back my 504 loan?

    Active 504 loans

    Loan payment terms differ according to numerous aspects. Borrowers with active 504 loans can pay through the Central Servicing Agent, normally by ACH regular monthly draws. Payments can also be made by wire or check.
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