SBA 504 Loan Program

The SBA 504 is a direct loan program of the U.S. Small Business Administration, which is available through Areawide Development Corporation, a regional, private, non‐profit economic development corporation. Areawide Development Corporation works with other economic development organizations to enable companies to access the 504 program.

Advantages to Business Owners
  • Low down payment allows business to keep more working capital
  • Long term of loan keeps monthly payments affordable
  • Assumable loans
Advantages to Lenders
  • Provides customer with up to 90% financing
  • Creates 50% loan‐to‐value through first lien on property
  • Independent credit decisions made with no SBA paperwork
  • CRA (Community Reinvestment Act) credit available for projects
Eligible Applicants
  • For profit
  • Less than 500 employees
  • Net worth not to exceed $15 million
  • 2 year average net income after taxes not to exceed $5 million
Eligible Uses
  • Building acquisition, expansion, construction • Land and site improvements
  • Machinery and equipment • Leasehold improvements
Financing Structure
  • SBA 504 40%
  • Equity 10%
  • Bank 50%
Loan Amounts
  • 40% of project cost (start up and special use facility 35%)
  • Maximum SBA loan of $5,000,000 and $5,500,000 for manufacturing
  • Minimum total project cost $200,000
Forms
Term
  • 20 or 25 years for real estate
  • 10 years for machinery and equipment
Collateral Required
  • Second lien on assets being financed
  • Personal guarantees for all 20% owners
  • Other collateral when applicable
Job Creation
  • One new or retained job for every $65,000 borrowed from SBA 504
  • Two years to create jobs
Service Benefits
  • Areawide Development serves as customer interface with Small Business Administration
  • Areawide Development reduces paperwork through experienced loan processing
  • Areawide Development’s experienced lending team provides creative solutions and responsive turnaround
Examples of Projects
  • Manufacturing
  • Convenience Stores
  • Professional Offices
  • Restaurants
  • Fitness Centers
  • Medical Practice
  • Vetrinary Hospitals
  • Franchises
  • Auto Dealerships
  • Motels
October 2020 Funding Rates
10 Year20 Year25 Year
Debenture Rate0.70%1.08%1.17%
Note Rate0.72851%1.0090%1.18764%