SBA 504 Loan Program

SBA 504 loan program is hands down, one of the best in the industry for business owners.  Primary benefits include, low down payment (10% Loan to Cost* 90% commercial financing) and some of the lowest fixed interest rates in the business.  Amortization periods can be as long as 30years as well with the SBA 504 loan.

(Click here if more interested in the Fixed Rate SBA 7a program) 

The 504 is essentially two loans, the first lien position private bank piece and the second lien position CDC or SBA piece.  The CDC piece is normally fixed and amortized over 20 years.  The bank loan ranges in terms like any commercial mortgage, though most are amortized over 25 years (30 years is possible) with fixed periods ranging from 5 to 10 years.  The bank loan cover 50% loan to value and the SBA loan covers 40% loan to value - the borrower contributes the last 10%. 

Down payment is factored off of the total project cost, meaning fees like closing costs, 3rd party costs, renovation costs, etc. can be rolled into the loan and the 10% down payment is factor off that total amount - keeping valuable capital in your business.  See example:

Typical Bank Loan
$1,000,000                  Purchase Price

$200,000                     20% Down Payment
$50,000                       Building Renovations
$35,000                       Closing Costs (Title, Bank Fees, etc)
$285,000                     Total “Cash Out of Pocket”


SBA 504 Through Commercial Finance Advisors
$1,000,000                          Purchase Price

$50,000                               Building Renovations
$35,000                               Closing Costs (Title, Bank Fees, etc)
$1,085,000                         Total Project Cost
$108,500                            10% Loan to Cost or “Cash Out of Pocket” 

As you can see the borrower in this example keeps an additional $176,500 in there pocket by rolling these costs into the loan.  This is a very important point that should be quickly brushed off.  Most conventional loan programs do not have this ability to include fee into the loan amount.  

Our typical borrowers see a 10-20% reduction in their real estate expense by owning rather than leasing.  In addition, due to long term fixed rates borrowers have no concerns over future rate increases or looming loan balloons, giving you peace of mind, not bank micro-management.

SBA 504 Qualifying Parameters:

• Purchase only, no refinances.
• Business owner only, no comercial real estate investors.
• Business net worth cannot exceed $7,000,000.
• Net income of business cannot exceed an average of $2.5 million during the previous two years.

The Bottom Line: The SBA 504 Loan Program from Commercial Finance Advisors preserves capital and maximizes cash flow for your small business.  Get Approved now and start building an asset rather than paying an expense.  248 885-8797

 *start-up or special purpose buildings require fifteen percent equity, while start-up and special purpose buildings require twenty percent 20%.

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Commercial Finance Advisors, Inc.
(248) 885-8797 Phone
(866) 337-3141 Fax
http://www.cfa-commercial.com/
261 E Maple Rd
Suite 13
Birmingham, Michigan 48009

 

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