Small Business Administration (SBA) 504 Program BackThe Small Business Administration (SBA) 504 loan program provides long-term; fixed rate; low equity economic development financing for small businesses to acquire, improve/construct real estate, and/or purchase major fixed assets for expansion. Download the SBA 504 brochure.100% Financing Available with SBA 504 Loans – Growing companies often look to conserve cash to solidify their working capital position for the long run, but often growth also requires down-payments on capital purchases for real estate and equipment needs. Fortunately, SBA 504 financing is available through CAEDC that offers companies expanding an existing facility or acquiring neighboring property for an expansion project an opportunity to finance 100% of their capital project costs. SBA 504 financing is performed in conjunction with a bank partner and does require a minimum 10% equity injection, however, a company’s real estate “as-is” appraisal valuation less its current outstanding mortgage balance can count toward the equity injection if the new project is taking place at the current facility or on an adjacent property. In such a case, the typical financing structure is shifted upward so the bank finances about 55% of the new project and the SBA 504 loan finances about 45%.SBA 504 CASE STUDIESMidway Bowling Center – Carlisle, PA THEIR SUCCESS: Renovations including new bar area, restored lanes, new gaming tables and shuttle bus. CAEDC SUPPORT: $257,000 investment through the SBA 504 loan programSPAtacular Escapes/The Carlisle Group – Mechanicsburg, PA THEIR SUCCESS: Acquired land and began construction on new office space and spa. CAEDC SUPPORT: $1,610,000 investment through the SBA 504 loan programWarrington Farm Meats – Dillsburg, PA THEIR SUCCESS: Expansion to their butcher shop and processing facility. CAEDC SUPPORT: $595,000 investment through the SBA 504 loan programELIGIBLE PROJECTSLand and building acquisitionBuilding construction, expansion and renovationPurchasing/upgrading long-term machinery and equipmentELIGIBLE BORROWERSMost for-profit, small businesses, including agriculture productionTangible Net Worth < $15 million2-year Average Net Income < $5 millionLOAN LIMITSUp to $5 million or 40% of total eligible project costs (whichever is less)Up to $5.5 million for certain qualifying projectsUp to $5.5 million for manufacturersTERM20-year fixed rate term for real estate10-year fixed rate term for machinery and equipment10% equity required15% equity required for new business projects and/or special purpose real estate2.2% commitment/closing fee – funded by Debenture. 0.5% Participation Fee is based on the first mortgage loan amount.RATEAs of September 2019: 25-year fixed: 3.63%; 20-year fixed: 3.53%; 10-year fixed: 3.94%STRUCTURELoans are made in conjunction with a loan secured from a private lender with a senior lien covering up to 50% of the project cost (50% – Private Lender; 40% – SBA; 10% – Borrower).