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Unlock Growth: An Entrepreneur's Guide to the SBA 504 Loan

SBA 504 feasibility study

Supercharge Your Expansion with Strategic Financing

Imagine acquiring that dream property or vital equipment for your business, but with significantly reduced upfront costs and favorable loan terms. The SBA 504 loan program makes this a reality for qualified small businesses seeking to fuel growth through fixed asset acquisition.

What is the SBA 504 Loan?

Unlike the widely known SBA 7(a) loan, the 504 program targets long-term financing for major fixed assets, primarily real estate and machinery. It's a collaborative effort between you, a participating lender, and a Certified Development Company (CDC).

Benefits for Businesses:

  • Low Down Payment: Contribute only 10% of the project cost, with the option to increase to 15% or 20% for specific situations.

  • Long-Term Fixed Rates: Enjoy predictable payments over 10 or 20 years with the SBA portion of the loan.

  • Reduced Collateral Burden: The financed assets often serve as collateral, minimizing the need for additional security.

Eligibility: Are You a Good Fit?

  • Established Track Record: While some exceptions exist, most businesses will have at least two years of operational history.

  • Industry Focus: The program prioritizes businesses that contribute to job creation and local economic growth,including exporters, manufacturers, and community development ventures.

  • Financial Strength: Demonstrate sufficient cash flow to repay the loan and a commitment to the project through your down payment contribution.

  • Tangible Asset Limit: Your business's tangible assets must generally not exceed $15 million.

The Power of Partnership: How it Works

The SBA 504 loan involves a three-way partnership:

  1. Your Business: You contribute 10% (potentially 15% or 20%) of the project cost and provide a solid business plan demonstrating job creation and economic impact.

  2. Participating Lender: A bank approved by the SBA provides 50% of the financing.

  3. Certified Development Company (CDC): These non-profit organizations, licensed by the SBA, contribute the remaining 40% of the project cost.

Beyond Financing: A Catalyst for Growth

The SBA 504 loan goes beyond just providing capital. It acts as a catalyst for strategic business expansion, allowing you to acquire the tools needed to propel your venture forward while creating jobs and bolstering your local economy.

Is the SBA 504 Loan Right for You?

If you're a small business owner with a vision for growth and a commitment to community development, the SBA 504 loan program could be the key to unlocking your full potential. Consult with an SBA-approved lender or CDC to explore your eligibility and embark on your journey toward business expansion.

Are you looking for a feasibility study for the SBA 504 program? MMCG serves feasibility studies for any real-estate-based project across the US. Contact us today for a quote for your project or to receive the market report, free of charge.


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