SBA 504 Loans
SBA Lending Definitions and parameters.
An SBA 504 loan provides long-term, fixed-rate financing for small businesses to purchase major fixed assets, such as commercial real estate and long-term machinery, often requiring a lower down payment than traditional loans.
| Asset Financing | 12 or 24 months statements to qualify (must be in business at least 12-24 months) |
| Loan size | 90% Loan to value (LTV) financing (for primary residence only), 80% on refinance cash out |
| Long-Term, Fixed Rates | 620 |
| Lower Down Payment | Up to $4,000,000 |
| Owner-Occupancy | Small businesses must occupy at least 51% of an existing building or 60% if constructing a new facility. |
| Minimum Fico | Generally 680 and above (exceptions for lower scores) |
| No major adverse credit history | Ex BK, FC, tax liens |
| Borrower profile requirements | Must have owner equity to invest, be willing to provide a personal guarantee (if own > than 20%), have a tangible net worth of less than $20 million, and have an average net income of less than $6.5 million (after for the two years preceding). |
Ineligible Business types: Not for profit, Financial businesses, non owner occupied businesses, passive companies, Life insurances, business located outside USA, gambling, private clubs, pornography, political lobbying, speculative businesses.