SBA 504 Loan Features
An SBA 504 loan has three parts
- Your bank will usually loan 50% of the project cost
- Oregon Business Development will usually loan 40% of the project cost
- Your down payment can be as low as 10% of the project cost *
Here are the basic qualifications
- Must be a for-profit company
- Building must be 51% owner-occupied for existing buildings
- Building must be 60% owner-occupied for new construction
- Almost all small businesses are eligible with net worth of less than $15 million and net profit after Federal tax of less than $5 million/year averaged over the past two years
Your SBA 504 financing package can be used for
- Purchase an existing building or commerical condo unit
- Purchase land & construct a new building
- Buy and install heavy machinery and equipment
- All loan costs, including appraisal, environmental, loan fees, etc
- Some refinance of existing debt may be eligible
A few of the advantages of SBA 504 financing
- Lower down payment than with conventional financing
- Longer loan term than with conventional financing
- With SBA 504 loans, collateral is not the primary credit consideration
- For growing businesses, projected income can be considered for debt repayment
For a quick pre-qualification, you’ll need
- Business tax returns for 3 years
- Current business income statement & balance sheet
- Listing of business debts & payment amounts
- Personal tax returns for 3 years
- Current personal financial statement
- Estimated project costs
* For new businesses or special use buildings, a 15% or 20% down payment will be required