The MOST information you can find in one place on 504 Loans
Below we have compiled a few resources that will help you learn more about our 504 Loans, and why they make so much sense to small business owners. Browse through them at your leisure, but please don’t hesitate to contact us if you need more information. We have set the standards for customer service.
Who qualifies:
Over 89% of incorporated small and mid-sized businesses are eligible for our 504 loans
Learn More:
• SBA 504 Loans are for fixed asset financing for Small Business Owners that Qualify
• SBA 504 means up to 90% of loan financing
• Borrower’s participation will be at least 10% of the project cost
Eligible Business:
• The business and its affiliates must be operated for-profit and fall within the size standards set by the SBA. Under the 504 Program, the business qualifies as small if it does not have a tangible net worth in excess of $8.5 million and does not have an average net income in excess of $3.0 million after taxes for the preceding two years.
• Must be a legal entity such as a partnership, a corporation, LLC, sole proprietor, etc.
• Business owner must be a U.S. citizen or resident alien with a green card. At least 51% of the total ownership of operating companies and holding companies must comprise U.S. citizens or permanent residents.
• The financing must be for a project located in the U.S.
• Borrowers must occupy at least a simple majority (or no less than 51%) of an existing property within the next year to qualify. For new construction, 60% owner occupancy is required.
Ineligible Business:
• Not-for-profit businesses except sheltered workshops
• Businesses engaged in lending or investment, i.e. banks, finance companies, loan re-packagers, or engaged in investment in rental real estate
• Businesses owned by aliens or located in a foreign country
• Businesses selling through a pyramid marketing plan, illegal businesses
• Speculative businesses
• Businesses engaged in political lobbying activities
What can an SBA 504 Loan Be Used For?
• Acquiring long-term fixed assets, such as land, buildings, machinery and equipment
• For new construction or for modernizing, renovating or restoring facilities.
Advantage of an SBA 504 Loan:
• Low down payment – As little as 10%
• Fixed rate on the SBA 504 portion
• Long term repayment – 10 to 20 years
• Low interest rate
• Processing time about two month
SBA 504 Loan Structure:
• Traditional lender (First lien holder).……………………..50%
• + Community Development Corporation (CDC)…………40%
• + Business Owner……………..…………………………..10%
• Total Loan…………….…………………………………..100%
SBA 504 Loan Amount:
Up to:
• $3.38 Million
• $4.50 Million (Women & Minorities)
• $9.00 Million (Manufacturers)
We’ll Walk You Through the Entire Process!
1. Royce Joseph Capital LLC will assist you through your business plans. We have the expertise to guide you through the entire loan process. Call us and we will find the perfect solution for your needs.
2. After directing you on the right course, Royce Joseph Capital will take your application with required documents.
3. Upon receipt of the required loan documents, Royce Joseph will craft a loan package and review it. After the borrower signs the completed package, Royce Joseph will submit the package to the underwriters at the Community Development Corporation. Royce Joseph works closely with the private lender in securing the First Mortgage approval. The process normally takes about two weeks.
4. After completion of the completed loan package, the SBA approval next takes about another two weeks. The private lender will provide interim and final financing for the project
5. An attorney designated by Royce Joseph prepares the closing documents for the SBA 504 loan, in which the borrower will sign upon completion. The final package of closing documents is submitted to the SBA, which typically funds within two months.
