.
The SBA 504 Loan---A
Fixed Rate Commercial Real Estate Loan With Only 10% Down
 View or Download
our SBA 504 Brochure in .pdf Format
The 504 Loan Program allows small
business owners to purchase an industrial or commercial building at
below-market interest rates with a minimum of ten percent down payment or equity
injection. The loan proceeds may be used to purchase or remodel an existing
building, construct a new facility or to purchase equipment with a minimum economic
useful life of 10 years.
How Much Can I
Borrow?
Generally, up to 90% of the total project cost or
appraised value of the property, whichever is the lesser amount. There is no minimum on the
total project size. The CDC debenture maximum is $2.0 million for most businesses and
$4.0 million for manufacturers.
Typical Structure:
The bank makes a loan in the first trust
deed lien position for 50% of the total project.
CDC issues a loan in the second trust deed lien position for 40% of the total project.
Borrower contributes 10% of total project. Loan
packaging is handled by the CDC.
50-40-10 Loan Structure
What are the
Terms, Rates and Fees?
The bank portion is typically
amortized over 25 years with a minimum term of 10 years or up to a maximum of 25
years. Rate term and fees are negotiable between borrower and lender.
The CDC portion can be offered with two
term options of 10 or 20 years fully amortized. The interest rate on a 504 loan is set
at an increment above the current market rate for five-year and ten-year U.S. Treasury
issues. Fees are approximately 2.75% of the loan amount, plus a fixed fee of $1,200 for a
legal review. All fees are financed in the 504 loan.
Are There Any
Requirements to Qualify for this Program?
Most small businesses meet the basic size 504 eligibility requirements of: Business Net Worth not to exceed $7 million, average Net Profit after taxes for 2 consecutive years
not to exceed $2.5 million or qualify under 7(a) size standards.
Other requirements include: 51% owner occupancy for existing
building purchase, 60% owner occupancy for new construction and if equipment, it must have a
minimum 10 year economic life.
Is it Difficult to
Apply?
Not at all. When applying for an SBA
loan - as with any loan - you are asked to fill out a standardized application
and provide specific documentation. At CDC, we provide a checklist to simplify
the process, will work with your accountant, and do all of the analysis,
packaging, and SBA interfacing for you. Our role is to keep the process easy
for our borrowers.
Download
our loan application here.
What's the
Turnaround Time?
24-Hour
Prequalification
Our experienced loan officers can provide you with loan pre-qualification in
just 1 business days. The complete procedure from application submission to
disbursement of funds takes approximately 45 to 60 days, depending on the
complexity of the loan.
At CDC Small Business Finance, we serve our customers with professionalism,
honesty and expertise. We not only believe an SBA loan is a great source of
funding for small businesses, but we put our commitment on the
line for you. We're extremely knowledgeable in the field, and try to match our
customers' financial needs and expectations to the most appropriate program available.
First Step to
getting your loan
We will work with your current bank or
help you identify a lender to participate in the 1st trust deed
portion of your financing. To speak with a loan officer in more detail, submit
some brief information on our
contact us
page inquiry or call (800) 611-5170.
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What
is an SBA 7(A) Loan? The best resource for General Business/ Operations
Capital.
7(A) Program
It's a loan that gives commercially
secure small- to medium-sized businesses, established entrepreneurs, and
professionals access to other resources for additional capital. The only
difference between this type of financing and conventional financing is the
government guarantee - which can be up to 75 percent of the loan amount and
make a big difference in getting a bank to approve your loan request.
How Much Can I
Borrow?
At CDC Small Business Finance there is
no minimum! The maximum is $500,000.
What Terms and
Rates are Available?
Loan terms range from 7 to 25 years,
depending on how you intend to use the funds. Rates are typically variable and
usually don't exceed 2.75 percent over low New York Prime interest rate.
What Can an SBA
Loan be Used For?
It can be used for any recognized
business purpose: to buy an existing business, as start-up capital for a new
business, working capital, to refinance existing debt, the purchase of new or
used equipment, the purchase of real estate for business purposes, or to
finance accounts receivable.
What is the
Definition of a Small Business?
There are size limitations (maximums)
to qualify for an SBA loan, based on your business's SIC code. The following
are guidelines; please feel free to contact us to discuss your particular
business.
Manufacturing - maximum 500 to 1,500
employees.
Wholesaling - maximum of 100
employees.
Services - maximum of $3.5 to $14.5
million three years average gross sales.
Retailing - maximum or $5 to $20
million three years average gross sales.
Is It Difficult to
Apply?
No. When applying for an SBA loan - as
with any loan - you are asked to fill out a standardized application and
provide specific documentation. At CDC Small Business Finance, we provide a
checklist to simplify the process, will work with your accountant, and do all
of the analysis, packaging, and SBA interfacing for you.
What's the
Turnaround Time?
CDC Small Business Finance is a
"Preferred Lender," and therefore we have the authority to approve
loans on behalf of the SBA, which cuts your approval time down considerably.
Non "Preferred Lender" organizations may require approval of both the
bank and the government, which can take from 30 to 60 days.
The complete procedure from application submission to disbursement of funds
takes approximately 30 to 90 days, depending on the complexity of the loan.
At CDC Small Business Finance, we
serve our customers with professionalism, honesty and expertise. We not only
believe a SBA loan is a great source of funding for small businesses and
start-ups, but we put our commitment on the line for you. We're extremely
knowledgeable in the field, and try to match our customers' financial needs to
the most appropriate program available.
First Step to
getting your loan
We will work with your current bank or help you identify
a lender to participate in the 1st trust deed portion of your
financing. To speak with a loan officer in more detail, submit some brief
information on our
Contact Us page
inquiry or call (800) 611-5170.
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Community
Loan Programs Offering Loans Under $50,000
View a
summary of our community loan programs in a PDF matrix
Bankers CDC
Micro Loans
Need a Business Loan?
Bankers CDC administers loan programs for financing
under $50,000 in San Diego, Orange, Riverside, and San Bernadino Counties.
These loan pools are a consortia of small business lenders that pull together
to make these loans available for businesses.
We can help if your bank can’t...
The Banker’s Small Business Community Development
Corporation help small business owners that do not meet criteria for
conventional bank loans or SBA financing. The loan pool is made available by
over 20 banks as an effort to "give back" to our local communities.
Women, minority and businesses in low to moderate income levels comprise 75% of
Bankers CDC borrowers. Millions of dollars have already been made available
through these micro-loan programs. .
What are the requirements?...
-Unlike regular bank loans, Bankers CDC judges
applicants on their character - not on their collateral. Businesses over one
year old that can demonstrate professionalism, satisfactory credit and positive
cash flows but may not have profit levels that are available for conventional
banking.meet the general qualifications!
To find out more information on our Bankers CDC Loans,
visit our Contact Us
page or reach us by one of the telephone numbers below:
Alex Robinson - 800.611.5170 (San Diego County)
Mike Ocasio - 800.337.6003 (Riverside County)
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Imperial
Valley
Loan officers in Imperial County can
provide the same loan offerings as mentioned above as well as the IRP
(Intermediary Re-Lending Program) outlined below.
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CDC Direct Loan
The U.S. Department of Agriculture and CDC Small
Business Finance address the special financing needs of businesses in
California’s Imperial Valley through the Intermediary Relending Program
(IRP). The SBA’s Office of Rural Development loans money to CDC, which
then re-lends it to small businesses in designated enterprise communities in
Imperial County. In addition to IRP funds, the borrower and a commercial lender
also contribute toward overall project financing.
In keeping with CDC’s original intent, primary
emphasis is placed on using IRP loans to create employment opportunities and
preserve existing jobs. Eligibility for IRP funding was expanded this past year
following a 1998 revision from the USDA in response to needs expressed by rural
communities to include a much wider range of businesses. Eligibility has now
been extended to hotels, motels, bed and breakfast inns, recreation and
tourist-related facilities, commercial fishing and educational opportunities.
To find out more information on the IRP Loan, Contact CDC Small Business
Finance.
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