SBA 504

SBA 504 Small Business Loan

The SBA’s 504 Loan Program is designed to help businesses finance the purchase of major fixed assets, such as land, buildings and/or equipment through long-term, fixed-rate financing.

SBA 504 applicants must:

  • Applicant operates as a for profit company
  • Applicant must occupy at least 51% of building to be purchased (or 60% of new construction)
  • Operate in the United States
  • Have a tangible net worth <$15 million and an average net income <$5 million after taxes for the preceding two years.
  • Not be engaged in speculation or investment in rental real estate
  • Be an eligible business
  • Have the ability to repay the loan
  • Demonstrate good character as established by SBA “Statement of Personal History”
  • Possess relevant management expertise
  • Present a feasible business plan

SBA 504 loans can be used for:

  • Purchasing land, including existing buildings
  • Constructing, modernizing, renovating or converting facilities
  • Making improvements to property
  • Purchasing long-term machinery and equipment

SBA 504 loans can NOT be used for:

  • Working capital or inventory
  • Consolidating or refinancing debt
  • Speculation or investment in real estate