SBA 504 Loan

The 504 Loan program provides long-term, fixed rate financing for purchasing real estate, major fixed assets, and capital improvements, that promote business growth and job creation. BICNY coordinates the financing package between a small business, a traditional private lender, and the U.S. Small Business Administration (SBA). The 504 loan consists of two loans: a conventional first loan, typically for 50 percent of the project cost, from a private lender. The SBA -backed portion of the 504 loan will be a second loan, financing up to 40 percent of eligible project costs. The remaining 10 percent of project costs will be an equity injection from the small business owner.

• Maximum SBA loan amount: Loans are generally capped at $11 million total project cost.

• Interest rate: Below-market interest rates are fixed for the life of the loan.

• Required equity: A low down payment (10 percent in most cases) conserves your working capital.

• Terms: 10, 20 or 25 year terms

• Use of proceeds: Long-term, fixed assets for expansion or modernization (usually real estate or large equipment). Refinancing of large equipment and/or owner-occupied commercial real estate may also be possible.

• Eligibility Requirements: 

  • Operate as a for-profit company in the United States or its possessions.

  • Have a tangible net worth of less than $15 million.

  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application.

  • Real estate purchased is 51% or more owner occupied, 60% or more owner occupied for new construction.