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The information provided by these calculators is for illustrative purposes only and accuracy is not guaranteed. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a BLP financial professional prior to relying on the results.

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Boost Borrower Flexibility with SBA 504 Equity Options - BLP - Business Lending Partners
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Boost Borrower Flexibility with SBA 504 Equity Options

Securing capital is often a major hurdle for business owners looking to expand. Fortunately, the Small Business Administration (SBA) 504 program offers flexible equity options—meaning equity contributions don’t always have to be cash. This flexibility is a game-changer for businesses with limited liquid assets looking to grow.

Here are some eligible sources of equity for the SBA 504 program:

1. Cash – The traditional route, but not the only option.

2. Existing equity in the project property – If the borrower already owns part of the property, that value can be counted as equity.

3. Equity in land gifted by a municipality – For businesses receiving land as a gift from a local government, this equity can help fund the project.

4. Developer loans from municipalities – Local governments may offer loans, which can be used as equity.

5. Seller financing – When a seller provides financing for the purchase, this can be considered equity.

6. Debt from economic development organizations – Loans from these organizations can also count toward equity requirements.

For startup businesses, SBA 504 guidelines require a minimum of 5% cash equity. The good news is that the remaining equity contribution can be borrowed from the options listed above, providing even more flexibility to help businesses get off the ground.

 

The SBA 504 program helps businesses grow by offering flexible financing solutions. If your borrower is low on cash but has other equity options, the SBA 504 program could be the perfect solution.

WHY SBA 504?
The SBA 504 program enables you to serve your current clients while also obtaining new prospects. Through this program, you can enhance your commercial financial portfolio, positioning your institution as an innovative and strategic partner for your clients.

 

WHY BLP?
BLP is a Certified Development Company (CDC) serving all of Wisconsin. As a financial partner, clients know they’re not just another number. Our partners benefit from having one contact – start to finish. Reduce risk, lend more, grow your portfolio!

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Wesley Walsh
Wesley Walsh
Vice President & Loan Officer Southern Wisconsin
Wesley Walsh's aptitude for navigating the world of commercial lending is outstanding and his passion for helping small businesses is second to none. Walsh graduated with Magna Cum Laude honors from UW-Eau Claire and previously worked at Associated Bank in Green Bay and as a business development officer at Tri City National Bank in Milwaukee.

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