What Is The 504 Loan Program

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504 loans


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What is the 504 loan program?


The 504 loan program provides long-lasting, fixed rate funding for significant set properties that promote organization growth and job production.


504 loans are readily available through Certified Development Companies (CDCs), SBA's community-based nonprofit partners who promote economic advancement within their communities. CDCs are certified and regulated by SBA.


The maximum loan amount for a 504 loan is $5.5 million.


Am I eligible?


To be qualified for a 504 loan, your organization needs to:


- Operate as a for-profit business in the United States or its belongings.
- Have a concrete net worth of less than $20 million.
- Have an average net income of less than $6.5 million after federal income taxes for the two years preceding your application


Other general eligibility standards consist of falling within SBA size standards, having actually qualified management proficiency, a feasible service plan, excellent character and the capability to repay the loan.


Loans can not be made to companies participated in not-for-profit, passive, or speculative activities. For additional details on eligibility criteria and loan application requirements, small companies and lenders are encouraged to contact a Qualified Development Company in their location.


How do I use a 504 loan?


A 504 loan can be used for a variety of properties that promote service development and task production. These consist of the purchase or building and construction of:


- Existing structures or land.
- New centers.
- Long-term machinery and devices with a beneficial remaining life of a minimum of 10 years, including project-related AI-supported equipment or equipment for manufacturing products.
- Consolidating financial obligation under the conditions noted in 13 CFR 120.882, paragraph (e) and.
- Repaying or refinancing debt defined as "competent financial obligation" under 13 CFR 120.882, paragraph (g)


Or the improvement or modernization of:


- Land, streets, utilities, car park and landscaping.
- Existing facilities


A 504 loan can not be used for:


- Working capital or inventory.
- Consolidating, paying back or refinancing debt that does not fulfill the meaning of "competent debt" under 13 CFR 120.882, paragraphs (e) and (g).
- Speculation or investment in rental realty.
The funding of AI-related working capital, intellectual residential or commercial property, or seeking advice from services soft costs


What do I require to apply?


504 loans are offered specifically through Certified Development Companies (CDCs). Find a CDC in your location to ensure you are handling a qualified loan provider. CDCs are uniquely certified to understand 504 loan program guidelines, and will help you navigate the lender channels to create your job funding.


Find a CDC near you


Find Certified Development Companies (CDCs) licensed to provide 504 loans.


How do I pay back my 504 loan?


Active 504 loans


Loan repayment terms vary according to several aspects. Borrowers with active 504 loans can pay through the Central Servicing Agent, normally by ACH month-to-month draws. Payments can also be made by wire or check.