Eligibility Facts

SBA Life Insurance Requirements

SBA requires a determination of whether the viability of the business is tied to an individual or individuals and whether a written succession plan exists. SBA requires life insurance for the principals of sole proprietorships, single member LLCs or for businesses otherwise dependent on one owner’s active participation, consistent with the size and term of the loan.

Learn more about the SBA 504 Life Insurance Requirement by following the link below.

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SBA Updated Program Regulations

Effective April 1st, new Standard Operating Procedures (SOPs) take effect for the SBA Loan Programs. Key updates impacting the SBA 504 program include the following:

  • Incorporating changes previously implemented on Debt Refinancing and for the 25-year debenture
  • Project eligibility updates
  • Changes to the franchise review process
  • Revised guidance on credit elsewhere regulations

For a customized SBA 504 Program overview or highlights on the updates to the 504 program, contact Carolyn Engel to schedule presentations to meet your needs. Case Studies on how others have benefited from the SBA 504 Program will be provided.

Credit Elsewhere Change!

SBA has listened to the lending community and has rolled back a change to the SBA program that was released earlier this year. When determining credit elsewhere, SBA is again looking at owners with 20% or more equity in the business (previously 10%). This determination does still include owner's spouses and minor children. In addition to personal liquidity, SBA will also seek confirmation that funding is not available from other non-government sources. BLP staff will work with you on your project to ensure this requirement is documented to meet SBA requirements.

Historic Properties

Just because a property is listed (or eligible to be listed) on the National Register of Historic Places does not mean the SBA 504 loan program cannot be used for financing. In fact SBA 504 now allows historic tax credits to be used in the front end of the project as equity contribution with a new master lease policy. When utilizing the master lease the tax credit investor does not need to guarantee the loan! When working with a historic property contact BLP staff early to assist in obtaining SBA approval on both the master lease as well as the work being done to the property.

Debt Refinance Options

Were you aware that the SBA 504 program has two different refinance products- with (no cash out) and without (cash out) expansion? In both cases the debt being refinanced must have originally been used for an eligible SBA use, building or equipment purchase and the borrower can tap into the assets' equity for the loans required equity injection. If you have a prospect that is interested in refinancing there fixed asset give one of our Loan Officers a call to discuss how a 504 loan can assist them.

Special Purpose Properties

SBA requires 15% equity injection into any project property that is considered special purpose. If the loan is the owner's second SBA loan (7a or 504) for a special purpose property then SBA requires a 20% equity injection into the project. The SBA SOPs define special purpose as "a limited-market property with a unique physical design, special construction materials, or a layout that restricts its utility to the specific use for which it was built." SBA does provide a list of properties it automatically considers special purpose, below. This list is not all inclusive but a great starting point for making the identification if a property is special purpose. Other triggers could be comments made by the appraiser in the appraisal report.

Special Purpose Properties Include:
Amusement parks
Car wash businesses
Cold storage facilities - more than 50% of total sq ft is equipped for refrigeration
Bowling alleys
Quarries, including gravel ptis
Golf courses
Sports arenas
Livestock & Dairy facilities
Sanitary landfills
Swimming pools
Gas stations
Service centers w/ pits and in ground lifts (oil and lube, brake or transmission center)
Tennis clubs
Hotels, motels, & lodging facilities
Hospitals, surgery centers, urgent care centers, other health / medical facilities
Nursing homes, assisted living facilities
Mines, Oil wells
If you have any questions on whether your borrower's property is special purpose give one of our loan officers a call and they can assist you in making the determination or completing a prescreen with SBA.

Loan Officer     
Loan Officer

VetLoan Advantage

BLP offers reduced processing fees for companies that are 51% or more owned by a military Veteran. As you review your next loan prospect be sure to keep our VetLoan Advantage Program in mind.

  • Loans less than $1.5MM: 0.5% of the processing fee is waived (up to $7,500 savings)
  • Loans more than 1.5MM: 0.25% of the processing free is waived (up to $12,500 savings)

25 Year Debenture Is Here!

SBA is accpeting applications for 25 year debentures (loans approved prior to April 2nd are not eligible for the longer term).

Highlights include:

  • Third Party Loans for 25 year Debentures must have a minimum term of ten years.
  • Prepayment Premium will still only apply during the first 10 years.
  • Loans will be sold monthly with the first sale being July 2018.

SBA 504 can also accommodate 10 and 20 year debentures.

For more information, contact Thomas Van Gent at 262-898-7434 or thomas@blp504.org.

Go Green and Save Big!

Small businesses looking to grow and expand their operations through the purchase or construction of commercial real estate and “go green” can qualify for as much as $5.5 million SBA 504 financing (up to 40% of total project costs) under the Energy Public Policy Goal, offered through Business Lending Partners. There is no limit on the number of SBA 504 green projects allowed to each borrower, unlike the “regular” SBA loan whose maximum eligibility limits is $5 million per borrower and all of its affiliates including all 7 (a) and 504 loans. This means businesses that previously reached their SBA maximum limits have the ability to receive additional loans under the SBA’s Energy Public Policy Goals

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SBA 504

May 2019

25-Year Fixed Rate:


20-Year Fixed Rate:


10-Year Fixed Rate: