The 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.
Growing companies often look to conserve cash to solidify their working capital position for the long run, but growth also requires down-payments on capital purchases for real estate and equipment needs. Fortunately, SBA 504 financing available through CAEDC, in partnership with the borrower’s preferred bank partner, offers companies 90% financing while locking in a below-market rate for the life of the loan.
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Download the SBA 504 BrochureEligible Projects
- Land and building acquisition
- Building construction, expansion and renovation
- Purchasing/upgrading long-term machinery and equipment
Eligible Borrowers
- Most for-profit, small businesses, including agriculture production
- Maximum Tangible Net Worth < $20 million
- 2-year Average Net Income < $6.5 million (after Federal income taxes, excluding any carry-over losses, for the 2 full fiscal years before the application date)
Loan Limits
- Up to $5 million or 40% of total eligible project costs (whichever is less)
- Up to $5.5 million for certain qualifying projects
- Up to $5.5 million for manufacturers
Term
- 20-year fixed rate term for real estate
- 10-year fixed rate term for machinery and equipment
Rate
- Contact CAEDC for current SBA 504 rates.
Structure
Loans 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). Additional equity contributions may apply for new businesses and special-purpose property entities.
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