Important Information
The SBA 504 program provides a low-down payment, as low as 10%, for the purchase of commercial real estate. This loan includes three participants - the borrower, the bank, and the SBA lending partner. The borrower's down payment is as low as 10%; the bank funds 50% or more of the loan and the SBA funds up to 40% of the loan. The SBA seeks to ensure that businesses can plan their costs over time, thus the interest rate for the SBA portion of the loan is fixed for 10, 20, or 25 years and amortized over the same period to make certain that mortgage payments are affordable for growing businesses.
Already have the information you need to get started?
A
Application
(Your part)
Information about you and your business, including your personal and business financial statements, and completion of forms.Â
B
Business Review
(AmPac Partner)
Review and analysis of the information you provided; additional questions to clarify what you sent.
C
Closing & Funding
(You & AmPac)
AmPac approves your loan; You signing loan documents and funds your loan.
A
Application
(Your part)
Information about you and your business, including your personal and business financial statements, and completion of forms.Â
B
Business Review
(AmPac Partner)
Review and analysis of the information you provided; additional questions to clarify what you sent.
C
Closing & Funding
(You & AmPac)
AmPac approves your loan; You signing loan documents and funds your loan.
Loan Details
The CDC/504 Loan Program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation.
504 loans are available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.
Eligibility
504 Eligibility At-a-Glance:
- This program is for the purchase of commercial real estate and heavy equipmentÂ
- You cannot use this for solely a rental purpose project
- Your business must be a "For-Profit" entity
- Your business must occupy at least 51% of the building , and can lease out the other 49% of the building
- Your business must be worth less than $15 million USD
- Your average net business income must be $5 million or less for the precious two years before applying for the loan
- You may not have previously defaulted on a federal loan , or be engaged in any sort of political, lobbying, lending, or gambling activity. You also cannot be engaging in speculative, or passive activities like land purchase for sale banking on the flip value of the resale to return profits, basing revenues on the investment sales return versus fee for services revenue.Â
- You must have a feasible and actionable business plan to get an SBA 504 loan !
- The project you want to fund must be able to generate enough cash flow to repay your loan successfully
- Ensure you Meet job creation requirements
Required Documents
A: Application (Who are you, and how responsibly have you managed debt)
- Application Form
- Personal resume of business experience
- Personal Financial Statement
- Personal History Statement
- 3 most recent years of Federal, Personal Tax Returns
- Form 4506-T (Personal)
- Coronavirus Questionnaire
- Last 3 months of Personal Bank Statements
- Copy of Driver's Licenses
- Copy of Any Trusts listing all trust assets (If Applicable)
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B: What is your business, and how successful has it been?
- A Business Questionnaire
- Business Debt Schedule (all debts of the business)
- Personal Tax Returns
- Form 1624
- Coronavirus Questionnaire
- Last 3 months of Business Bank Statement
- Business Plan (Start up only)
- 3-Years Projections (Start-up/major business improvements only) Â
Pre-Screen Questions:
- Estimated Credit Score?
- Any Pending Lawsuits?
- Any owed Federal or State Taxes?
- Ever defaulted on Government Debt?
- Ever filed BK or Foreclosures?
- Any Collection Accounts, Judgements or Tax Liens Unpaid?
- Will you be Expanding or Relocating?
- Do you own 20% or more of other companies?
- Did you receive the PPP or EIDL Loans? Â
Other:
- Purchase Agreement/Title/Escrow Instructions
- Copy of Existing Lease at current location
- Copies of the PPP and/or EIDL Loan Documentation/Loan Number (If Applicable)
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C: Closing; The Lender is ready to bear the risk with capital to grow your business
- Reviewing and signing Loan DocumentsÂ
- Return of any final conditions to closeÂ
- Funding the Loan
Key Takeaways
- Low down payments, as low as 10% for commercial real estate.
- A business owner must occupy 51% of the building, but they may lease up 49%.
- This loan includes three participants: the borrower, the bank, and your SBA lending partner , AmPac.Â
Start Your Application
SBA 504 Calculator
504 Informational Terms and Conditions
Supplemental Information Regarding the Rates:
- The Bank Rate is estimated – will vary depending on lender.
- The SBA Rate IS FIXED at the time of the debenture sale. Rate for current month is shown
See supplemental information regarding the Estimated Fees below:
- The Bank estimated fees vary depending on lender policy.
- The SBA administrative fees are approximately 2.15% of the SBA portion of the loan, plus legal fees. Fees are financed and included in the SBA loan amount.
The Related Costs:
- Appraisal, environmental reports (if required), as well as escrow closing costs (including the insurance and the legal closing costs) may be financed in the loan as well!
Collateral Information:
- Up to 90% financing, generally, does not require additional collateral beyond what is being financed
Do you have questions for us?
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