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SBA 504 Case Study

Sports and Rec Company Uses SBA 504 to Expand in Rural Market

Small Business Administration (sba) 504 Loan

The SBA 504 loan program partners with a financial institution to create an attractive financing package to benefit businesses. Working together with the SBA and Business Lending Partners, growing businesses throughout Wisconsin can receive affordable, long-term, fixed-rate financing to expand operations and create job opportunities.

A typical SBA 504 Loan (including the one in this case study) is structured as 50% from the bank at the bank’s rate, 40% from the SBA at a long term, fixed-rate, and 10% equity from the borrower.

SBA 504


The purpose of this SBA 504 loan is to assist a fitness and recreational sports company with a building purchase, renovation costs and additional equipment purchases. The established business has outgrown the space they are renting at 2,550 sq ft and the new project facility will provide 4,425 sq ft, with a second story.

The building purchase is for two units of a 5-unit condo located four miles from their current location in a rural market. The larger capacity of the new facility will compliment the company’s significant growth.

The company currently employs one part-time and three full-time staff. As a result of project expansion, three additional employees will be hired. Utilizing the SBA 504 Loan Program, in partnership with Kevin Huff at Chase Bank, this company found the ideal financing solution to meet their growing needs.

WHAT WAS UNIQUE ABOUT THIS LOAN? - Karmin Garstecki, Loan Officer

  • While collateral is below 100%, the loan is mitigated by life insurance of the borrower for the amount of the debenture.
  • The business qualifies for a waiver of job creation based on a Rural Development public policy goal.
  • Proven management experience and strong historic cashflow sufficient to support the proposed debt service.


Since opening five years ago in an expanding rural market, borrower has grown rapidly with increased sales growth every year. Operating at full capacity out of current location, it became necessary to construct and renovate a larger facility, purchase additional equipment and hire more employees.

prioritization criteria

Company's location adds value to local economy

job creation within a rural market

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