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SBA 504 Loan
Program Basics |
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What
is the 504 Loan Program?
Purpose: Economic
Development Small Business Loan Program
- Stimulate private sector investment
Help create new jobs and/or save existing jobs
Business expansion and start ups
- Enhance access to capital
Request
Types: Fixed Asset Permanent Financing Program
Who is
Eligible:
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Private,
for-profit small businesses, start-up or expansion financing
requests
- Net worth of less than $8.5 million, two year
average after-tax profit less than $3 million
- Creating or retaining one job for every $65,000
borrowed (may be waived)
What Are the Terms?
- Structure: Participation financing involving
a private commercial lender and a Certified Development Company
(CDC) such as Cascades West Financial Services, Inc. Collateral: Second position lien or security
interest in the project assets Term: 10 to 20 years Rate: Fixed rate set at funding, plus annual
servicing fees Payment Premium: Declining premium exists for
the first half of the loan term
- Equity: Minimum equity contribution of 10% by
businesses, additional equity may be required dependent upon the
nature of the collateral or age of the business
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What are
the Loan Costs?
Loan Fees: Approximately 2.75% of
the CDC/SBA loan amount (all financed)
- CDC charges a fee of 1.5%
National Association of Development Co. charges a
funding fee of .25%
- Brokerage agents charge an underwriting fee of
approximately .50%
Bank Fee: Participating Lender
pays a one time .50% participation fee on its loan
amount.
Closing Costs: Up to $5,000 of closing costs
can be financed
- Attorney closing fee of $2,500 plus closing costs
Who Puts the Loan Together?
Cascades West
Financial Services, Inc. (CWFSI)
- Packages the loans for projects working with the
business to complete loan package
- Closes and services the SBA loan
What
Do I Do Next?
Please click on the link below to fill
out our loan application. Our expert loan officers are available
to assist you along the way and answer your questions. Schedule an
appointment to meet with a Cascades West loan expert today and to
get started!
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SBA 504 Loan Application
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