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SBA (Small Business Administration) 504 Loan Program
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This SBA program is specifically suited to commercial real estate that is being constructed or purchased by a start-up or existing business. It is a unique program in that it combines a first mortgage loan of approximately 50% of the project costs, and a second mortgage loan of up to an additional 40% of project costs. The program is available for most types of commercial properties and has the following features:
Property Types:
- Retail
- Office
- Industrial/Light Manufacturing
- Motel
- Restaurant
- Gas Station
- C-Store
- Day Care
- Assisted Living
- All other owner-occupied commercial properties considered
Loan to Value:
Up to 90% LTV
Loan Amounts:
$300,000 to $10,000,000
Loan Term:
Usually 25 years on the first mortgage and 20 years on the second mortgage
Interest Rate Information
Interest rate on the first mortgage can be fixed or floating, depending upon the borrower's goals. The interest rate on the second mortgage is fixed and currently is in the 6% range. Contact us for estimated pricing.
Refinancing
The SBA 504 loan program cannot be used for refinancing.
Secondary Financing
Permitted in most circumstances subject to subordination to both the first and second mortgages.
Other Features
Project costs such as closing costs, construction and permitting fees, and other soft costs may be included in determining LTV.
Additional Information
For additional information specifically related to SBA loans, please visit our affiliate's website at www.sbaloangroup.com.
For more information on the differences between the SBA 7(a) and SBA 504 programs, see this CHART.
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