25-YR FIXED RATE
6.51%
20-YR FIXED RATE
6.58%
10-YR FIXED RATE
6.64%
REFINANCE RATE
+0.025%
empowering economic growth
504 loan program
SBA 504 Loans Success Stories
expansion solutions
Purchase a Building
Construct a New Facility
Renovate Your Current Property
Purchase Heavy Machinery or Equipment
Refinance Commercial Mortgage Debt
Recent Blog Posts…
More Businesses Are Now Eligible for SBA Growth Capital
We have good news…more businesses are now eligible for SBA growth capital as SBA has taken steps to significantly improve...
SBA 504 Refinancing featured in Forbes!
On December 9, 2024, Forbes published an article titled, "With Rates Dropping, the SBA is Relaxing Its Refinancing Rules...
How SBA 504 Loans Work
50%
LOCAL BANK
A bank provides a first mortgage for
50% of the total project costs
40%
SBA 504 LOAN
Growth Corp provides an SBA 504 Loan
for 40% of the total project costs
10%
BORROWER EQUITY
The borrower provides a down payment of
typically just 10% of the total project costs
Higher equity requirements exist for start-ups or special purpose properties…the equity required will increase by 5% if one condition exists or by 10% if both.
SBA 504 Loans are made in conjunction with your local bank...so you can keep your lending relationship.
504 Case Study – New Construction
A widget manufacturer that has been leasing space wants to construct a building to facilitate business expansion.
| Purchase Land | $500,000 |
| Construct Building | $1,500,000 |
| Purchase Furniture & Fixtures | $250,000 |
| Soft Costs* | $150,000 |
| Total | $2,400,000 |
*Soft costs can include interim interest and fees, professional fees, a construction contingency, appraisal and environmental costs, etc.
If a bank was willing to finance the project conventionally, it would typically lend up to 80% of the project costs at a floating interest rate with a 15 year amortization and a balloon after three to five years. However, utilizing the 504 Loan Program, up to 90% of the project costs can be financed. The bank lends up to 50%, thereby reducing its risk and corresponding interest rate. Growth Corp lends up to 40% at a fixed rate for 20 years, with a down payment of only 10% from the borrower.
| Conventional | With 504 | |
| Bank | $1,920,000 | $1,200,000 |
| Growth Corp | $0 | $960,000 |
| Borrower | $480,000 | $240,000 |
| Total | $2,400,000 | $2,400,000 |
As shown, the borrower’s equity injection can be reduced by $240,000, thereby conserving cash and providing the necessary working capital to support continued growth. Additionally, cash flow is improved as a result of the longer maturity and potentially lower interest rates.
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SBA 504 LOANS
How Will You Grow Your Business?
877-BEST 504
www.GrowthCorp.com
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