Frequently Asked Questions
Why Should I Consider A SBA 504 Small Business Loan?
The benefits of a SBA 504 loan includes a low down payment, longer loan terms, and larger loan amounts than may be available through a conventional loan. In most cases, the borrower’s down payment will be 10% of project costs. Interest rates on the SBA 504 loan are below market rate and is fixed for the duration of the loan term (10 or 20 years).
Is Qualification Dependent Upon How Long I Have Been In Business?
There is no rule regarding length of time in business. However, start-up businesses are subject to a higher level of scrutiny. Additional owner equity may be required.
How Much Can I Borrow?
There is no limit on the bank portion of the loan. The SBA portion has recently been increased to the following amounts: up to $5 million for regular loans and up to $5.5 million for Manufacturers and certain energy-related projects.
Is There A Lot Of Paperwork?
The paperwork is comparable to that of any business loan. Loan officers at NSDC work with borrowers to help them complete the requirements and process the application.
How Long Does It Take To Obtain An Approval?
After an initial meeting to discuss the 504 Loan process and your business needs, we can pre-qualify your application in three business days.
What Fees Are Involved?
fSBA Fees: 2.65% of the SBA portion of the loan, plus a fee for the SBA-designated attorney to review the loan package. ALL SBA fees are financed.
What Costs Can Be Financed?
All costs that are directly attributable to the purchase or construction project can be financed, with a qualifying appraisal value.
What Are The Collateral Requirements? Will I Have To Pledge My Home?
The assets to be financed (for example, the land and building) are the only collateral. Personal residences are not typically required as collateral.
Is My Loan Assumable?
Yes, SBA 504 loans are fully assumable, upon qualification.
Is There A Maximum Project Size?
No, there is no maximum project size. For most projects, the maximum SBA loan is between $5 and $5.5 million, but there is no limit on the bank portion.
Can I Refinance A Building I Already Own?
Yes! Contact us for more information.
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