SBA 504 LEASE REQUIREMENTS
When SBA finances a property to be leased to the operating business, specific requirements apply to the lease as follows:
The rent or lease payments cannot exceed the amount necessary to make the loan payments and an additional amount to cover the direct expenses of holding the property such as routine maintenance, insurance and property taxes.
“The amount of rent to be paid by the Lessee shall be equal to the sum of (a) debt service (principal interest and other charges) due under the Landlord’s 504 note to Racine County Economic Development Corporation/ United States Small Business Administration; (b) debt service (principal, interest and other charges) due under Landlord’s note to __ Bank; (c) any renewals, extensions, or refinancing there of (but not any increases in the principal amounts) outstanding at that time and (d) maintenance fees on the property including but not limited to real estate taxes and insurance.”
Total square footage of all buildings used for business operations excluding vertical penetrations (stairways, elevators, and mechanical areas), and including common areas (lobbies, passageways, vestibules, and bathrooms). Rentable property may also include exterior space (except parking areas) that is actively used in Borrower’s business operations including outdoor storage yards for general contractors, trucking companies, and moving and storage companies, boat slips and docks for marinas.