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July 2024
SBA 504 LOAN RATES

10 YEAR

20 YEAR

​25 YEAR

6.17%

6.39%

6.37%

A new 504 rate is established once a month. If you would like us to email you the new 504 rate each month, please enter your e-mail address here:
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What is an SBA 504 loan?
 The SBA 504 Loan Program assists small businesses in receiving the opportunity of financing their expansion projects with attractive rates and terms. The financing can be used for the purchase and/or development of land and building for business purposes. The 504 program offers fixed rates for capital expenditures with up to ninety percent financing; the SBA portion can finance up to forty percent of a project's fixed assets.
What can an SBA 504 Loan be used for?
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 SBA 504 loans can be used for the purchase or construction of existing buildings or land 
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 SBA 504 loans can be used for the improvement/modernization of land, streets, parking lots and landscaping 
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SBA 504 loans can be used for the purchase or construction of new facilities
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SBA 504 loans can be used for the purchase or construction of long-term machinery and equipment
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SBA 504 Loan vs. SBA 7(A) Loan

Value
SBA 504 LOAN
SBA 7(A) LOAN
Loan Size
Minimum - $100,000
Maximum - $20 million +
​Minimum - $50,000
Maximum - $5 million
Interest Rate
Fixed
 Mostly variable; some fixed options available
Term
25 years
Up to 25 years - real estate
Up to 10 years - business acquisition and equipment
5 to 7 years - working capital
weighted average for mixed requests
Down Payment
10% borrower *
Minimum 10% borrower (often more)
Business Size
Business net worth of $20MM or less ​
Determined by Industry type
Loan Structure
  50% bank loan
40% CDC/SBA loan
10% borrower down payment
​ Structure negotiable - depending on risk
10% minimum down payment from borrower
Use of Proceeds
​​ Purchase of existing building
Land acquisition and ground-up construction
Expansion of existing building
Building Improvements
Purchase equipment  
Start, purchase or expand a business
Purchase or construct real estate
Refinance existing business debt
Buy equipment
Working capital
Leasehold Improvements
Purchase Inventory ​
Program Requirements
51% owner occupied for existing businesses
60% owner occupied for new construction
Equipment: minimum 10-year economic life  
51% owner occupied for existing businesses
60% owner occupied for new construction
All assets financed must be used for the direct benefit of the business
Collateral
Generally, project assets being financed are sufficient collateral
Personal guarantees of principal owners of 20% or more ownership
Assets financed by loan proceeds
Generally, pledge of personal residence
Personal guarantees of principal owners of 20% or more ownership   ​
Fees
Fees are financed in the 504 loan
Fees for the 50% bank loan
Servicing fee plus a legal review fee   ​
Fees can be financed in the 7a loan
Fees vary with the size of loan
Additional .25% charged on any loan portion above $1 million
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​The SBA 504 loan consists of a first mortgage, for 50 percent of the total project cost, from a third-party lender (local bank).
​
The SBA 504 loan will be a second mortgage, provided by So Cal CDC, financing up to 40 percent of total project costs. 


The remaining 10 percent will be provided by the small business owner as a down payment for the total project costs.


SBA 504 Loan Eligibility

Small businesses interested in purchasing real estate and/or equipment may qualify for the SBA 504 Loan Program.
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1.  Must operate as a for-profit company in the U.S or its possessions 

2.  Must have a tangible net worth of $20MM or less

3. Must have an average net income after taxes of $6.5MM or less for the past 2 years
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SBA 504 Loan Process

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​15455 San Fernando Mission Blvd. , Suite #C200 Mission Hills, CA 91345
(818) 638-7001

  • HOME
  • SBA 504
    • RECENTLY CLOSED
    • RATES HISTORY
    • FUNDING DATES
    • SBA FAQ
  • BANKERS
    • BANKERS FAQ
  • BUSINESS OWNERS
    • TESTIMONIALS
    • SUCCESS STORIES
    • BUSINESS OWNERS FAQ
    • PRE-QUALIFICATION FORM
  • CRE BROKERS
  • EVENTS
  • CONTACT
    • ASSISTANCE