HAB eBanking

Real Estate Loan Program 504

SBA 504 loans are designed specifically for financing owner-occupied commercial real estate or other long-term fixed assets with a lower down payment. Financing is provided in partnership with a Certified Development Company (CDC). SBA 504 loans are generally structured with 50% financing by Lender/Bank who assumes the first lien position, 40% financing by the CDC who assumes the second lien position and10% down from the borrower. The Borrowers must occupy at least 51% of existing structures purchased with loan proceeds.

Eligibility:
  • Existing, for-profit businesses
  • Net worth $6MM or less, net profits after taxes $2MM or less
  • 1 job created for every $50,000 in SBA loan funds
Amount:
  • From $150,000 to $3,000,000 ($2,000,000 for special purpose real estate)
  • Maximum SBA loan $1,500,000 (Up to  $4,000,000 for small manufacturers)
Uses:
  • Buildings (new purchase)
  • Machinery & Equipment (minimum useful life of 10 years)
Rates:
  • Bank’s portion– rate negotiated between borrower and Bank (fixed or variable)
  • SBA/CDC portion below market fixed interest payment , loan rate set when debenture is sold
Loan Terms:
  • Lender's loan – minimum 10 years on Real Estate;
  • 7 years on Machinery & Equipment
  • SBA/CDC loan – 20 years
SBA Fees:
  • Normal fees and closing costs apply to the bank loan plus a .5% participation fee. Typically the SBA has various fees of approximately 2.25% of the SBA loan amount.
  • *Fees may be included in the total financing amount