Lenders & Brokers

Your financial institution may offer the possibility of prepayment on their portion of the financing. There are declining prepayment penalties that apply toSBA 504 loans.

• Businesses incorporated as “for-profit”. Nonprofits are not eligible.
• Businesses operating within a “non-passive” business model. This includes the vast majority of businesses. Notable exceptions include investment real estate, gambling, foreign-owned, and marijuana-related businesses.
• Businesses must be considered “small” by SBA standards. Generally this requires that the business and its affiliated companies have a net worth of less than $15 million and average net income less than $5 million. 
• Startups

BLP can partner up with any financial institution of your choice!

The 504 Loan Program is a U.S. Small Business Administration (SBA) funded program that provides financing to small and mid-sized businesses for the purchase of equipment and commercial real estate. The SBA loan is administered by a Certified Development Company (CDC) such as BLP in partnership with a commercial bank or credit union lender. Learn More

The rate on the 504 loan is set upon funding of the SBA loan following the completion of the project. Click here to see Historical Rates

Business Lending Partners (BLP) provides up-front eligibility screening services to determine if a small business meets the general criteria to qualify for an SBA loan. Start with our assessment form today to start the qualification process.

A Certified Development Company (CDC) is an entity that processes U.S. Small Business Administration (SBA) 504 loans in partnership with Bank, state and/or private money creating a financial assistance package for businesses with funding needs for real estate and equipment. The SBA takes a second lien on the property or equipment financed at a maximum participation level of 40% of the total funding needs. SBA certifies corporations to be CDC’s and authorizing them to process SBA 504 loans.

When your loans close and your SBA 504 loan is funded, you’ll incur various fees totaling approximately 2-3% of the SBA loan amount, plus an attorney closing fee of $2,500. These fees are financed within the SBA loan proceeds, so they are not out-of-pocket expenses. BLP will collect a deposit for a portion of these fees only after approval is received from SBA. There are no application fees.

SBA will take a subordinate collateral position behind the primary lender. Generally, collateral will include only the assets being purchased with SBA loan funds. The 504 program does not require additional collateral as required within the 7(a) program such as personal assets of owners.

Projects must be centered around owner-occupied commercial real estate and/or fixed equipment. This can include ground-up construction and renovations.

Compared to conventional commercial financing, the SBA 504 program helps borrowers reduce their down payment and fix the interest rate on a portion of the financing for up to 25 years at a rate that is typically below-market. For lenders, risk is reduced as the primary lender will typically lend 50% of the cost while SBA bears most of the collateral risk with a subordinate lien position. More Benefits

To be eligible for the SBA 504 program, each business must meet the following criteria:

• Operate as a “for profit” business.
• Be considered a “small business” under SBA’s size standards:
  • Under the 504 Program, the business qualifies as small if it does not have a tangible net worth more than $15 million and does not have an average net income more than $5 million after federal taxes for the preceding two years.
  • If these standards are exceeded, the business can still qualify for the program by meeting other SBA size standards based on either the number of employees or annual revenue, depending upon the industry. Loans made to the owner-occupied real estate. For a quick no cost eligibility screening, please contact a BLP staff member. Read more on Eligibility criteria.

Read more on Eligibility criteria.

Our loan calculator 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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Yes, newly established companies would need to provide a written business plan with financial
projections.” The financing structure also changes in that SBA requires an additional 5% cash equity injection from the borrower reducing SBA’s participation level in that project.

Yes! For existing commercial real estate properties, the borrowing company must occupy at least 51% of the leasable area and the remainder can be leased to third parties. For new construction buildings, the borrowing company must occupy 60% of the leasable area immediately with plans to occupy 80% over time.

Yes! Generally, the SBA 504 program can be used to refinance debts that were originally incurred primarily to fund purchases of owner-occupied commercial real estate and/or fixed equipment.

Yes, however, there are two conditions to consider:

1. The loan may only be prepaid in its entirety. Partial prepayments are not permitted.
2. An annually declining prepayment penalty applies during the first 10 years of the loan.

Yes, the down payment can also be in the form of:

• Value of previously acquired land (which can include building(s), structures, and other site improvements that will be part of the project property). This value would need to be supported by an appraisal submitted with the loan application.
• In some situations, the down payment can be borrowed.

Generally, the 504 program will make sense for projects with a total cost of greater than $400,000. All borrowers are eligible for up to $5 million in aggregate SBA financing through the SBA 504 & 7(a) programs. Projects involving small manufacturing firms and green-energy generation are eligible for up to $5.5 million on each project.

Typically job creation or retention is a need with one job needing to be created or retained for every $75,000 being borrowed from the SBA ($120,000 per job for small manufacturers); however, this requirement can be waived if another goal set forth by the SBA is met.