SBA 504 Loan Program

The Money That Makes America Work

Growth Capital Corp. is a Certified Development Company (CDC), which is a private nonprofit corporation, certified by the SBA to process 504 loans and contribute to the economic development of the community.  The SBA 504 Loan Program was developed by the U.S. Small Business Administration (SBA) to make available long term, fixed interest rate loans with lower down payment requirements to existing small businesses with fixed asset financing needs.  At Growth Capital we work together with business owners and bank loan officers to administer SBA 504 loan participation

 

Use of Funds

Fixed Asset Financing

  • Land & Building Acquisition
  • Building Improvements/Renovations
  • New Construction
  • Purchase of Machinery & Equipment

 

Eligible Businesses

For Profit Businesses

  • Business Net Worth Less Than $15 Million
  • Business Profit After Tax Less Than $5 Million
  • Job Creation Requirement of 1 New Job for each $65,000 of SBA Funding. 1 New Job for each $100,000 of SBA Funding for manufacturing loans (companies in NAICS sectors 31, 32, 33)
  • All Industry Types:  Manufacturing, Industrial, Service, Retail, Medical, Wholesale, and Distribution

 

Available Financing

  • Up to 40% of Total Project Cost may be Financed by SBA 504
  • Minimum Equity Requirement of 10% of Total Project Cost
  • SBA Loan Sizes from $50,000 to $5,000,000 for regular loans, and up to $5,500,000 for manufacturing loans.
  • SBA Loan Terms are 10 or 20 years (fully Amortizing)
  • Interest rates are fixed at the time of the SBA loan closing based on Current market U.S. Treasury rates plus approximately 1.5%
  • Participating Bank Financing Terms, Rates, & Fees are Negotiated between the Customer & Bank Loan Officer

 

Associated Costs and Terms

  • Processing Fee of 2.15% of the SBA loan amount is financed into the SBA loan
  • Fee of ½% on the Bank’s First Mortgage Amount collectable at the SBA closing
  • Ongoing Servicing Fees totaling .914% of the outstanding SBA loan balance are included into the Effective Interest Rate
  • SBA 504 loan Closing and Legal Costs ($3,500) are the Responsibility of the Customer but may be financed in the SBA loan
  • The Participating Bank must advance an interim loan for up to 90% to fund the SBA portion.  SBA 504 is “take-out” permanent, second mortgage financing

The primary advantages of the SBA 504 Loan Program to a small business owner are the lower down payment, longer loan terms and fixed interest rates.

Please call John Kropf or Juan Hernandez at (216) 592-2332 for more information.