How To Qualify For The SBA 504 Loan-Small Business Administration Loan

Posted on October 17, 2009
Filed Under business loans | Leave a Comment

The SBA 504 Loan program allows small to mid size business owners to purchase a commercial property for owner/user building. Under this program, Business owners can purchase a commercial property with as low as 10% down payment and obtain longer term and more favorable rates. Following the SBA guidelines, over 90% of incorporated entities are qualified small businesses and eligible for our SBA 504 Loan.

Eligible Borrowers:
• For-profit, non-publicly traded businesses.
• Tangible business net worth (including affiliates) not to exceed $8.5 million.
• Average net income of the business not to exceed $3 million over the previous two years.
• Personal liquidity of each principal/guarantor not to exceed the total project costs of the proposed 504 loan.
• Ownership must be comprised of 51% U.S. citizens or resident aliens (Legal Permanent Residents).

Ineligible Borrowers:
• Non-profits (except sheltered workshops).
• Passive holders of real estate and/or personal property.
• Lending institutions (mortgage brokers and correspondent lenders are eligible).
• Life insurance companies (however, franchised agents are eligible).
• Businesses located in a foreign country or owned by aliens.
• Businesses selling products/services through a pyramid plan.
• Illegal businesses.
• Gambling concerns.
• Businesses which restrict patronage.
• Government owned entities (excluding Native American Tribes).
• Businesses engaged in promoting religion.
• Consumer and marketing cooperatives (producer cooperatives are eligible).
• Businesses engaged in loan packaging.
• Businesses owned by persons of poor character.
• Businesses providing prurient sexual material.
• Businesses that have previously defaulted on a Federal loan.
• Businesses engaged in political or lobbying activities.
• Speculative businesses.

If your business didn’t make this list, then it’s probably okay.

Ineligible Use of Funds:
• Refinancing (unless debt has been in place for less than 9 months).
• Working capital.
• Inventory.
• Rolling stock.
• Business “good will” or “blue sky” (common in business acquisition financing).

Here is an article from Atlanta Business Chronicle:

The Small Business Administration reported loans it supports are on the rise.
The $1.9 billion volume for September was the highest single-month total since August 2007, SBA said.
Since the stimulus bill passed in February, SBA has supported more than $11.3 billion in lending to small businesses through its two largest loan programs and seen its average weekly dollar volume increase by more than 60 percent in comparison to the weeks before…..
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Many people are not used to SBA Loans due to prior market conditions, where many lenders and regional banks use to have done any kind of loan. Also majority of people do not have enough knowledge about what SBA Loan can do for them.

Many people think SBA loan are only for start up businesses or small business who want to expand. However, SBA loans can go up to $4 Million dollars. SBA loans are offered for business purposes such as owner-occupied commercial real estate, business acquisitions and start-ups; franchise financing, working capital, improvements and renovations, inventory and equipment and debt refinancing.

City Capital Finance is a recognized leader in SBA financing solutions and has the experience needed to make SBA borrowing easier and more convenient for our small business customers.

So don’t wait and contact us for more information or visit http://www.easysbaloan.com/.

To learn more about SBA loans please visit www.easysbaloans.com or call us at 877-900-1211

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