SBA 504 Loan Program

Almost any type of business is eligible: Manufacturer, distributor, retailer, etc. Start-ups as well as existing businesses are eligible. Businesses must meet with each of the following requirements to apply for a 504 loan:

1. Business must be for-profit and must average less than $2 million in profits after taxes and have less than $6 million in tangible net worth.

2. Projects must, according to SBA guidelines, promote economic development. Generally, this entails the following: Creation of jobs, being located in a distressed area, Rural Development, Expansion of Exports, Minority Business Development, Enhance Economic Competition, or business restructuring due to Federally mandated policies affecting the environment or Federal Budget cutbacks. To be eligible under job creation/retention (the most common), one full-time equivalent job must be created or retained for every $65,000 that SBA lends.

3. There is no maximum project size under the 504 loan program, since there is no limit on the bank loan. The maximum 504 loan is $2,000,000 and the minimum 504 loan is $50,000.

4. If purchasing an existing building, the small business must occupy at least 51%. If constructing a new building, the business must occupy at least 60%. If the owner of the property and owner of the operating entity are different, each 20% or more owner of each entity must guaranty the loan.