LOAN SIZE
$200,000 to $15,000,000+
BORROWER CONTRIBUTION / EQUITY INJECTION
- A minimum of 10% unless …
- The operating company has been in business less than 2 years, then 15% or
- If the project involves a limited or single purpose building, then 15%
- At least 20% if both a new business and special purpose property
Bank Loan |
50% of Project Cost |
50% of Project Cost |
50% of Project Cost |
NTCDC / SBA 504 Loan |
Up to 40% of Project Cost |
Up to 35% of Project Cost |
Up to 30% of Project Cost |
Borrower’s Equity |
At least 10% of Project Cost |
At least 15% of Project Cost |
At least 20% of Project Cost |
SBA PORTION OF PROJECT COST
- $5 million maximum, or …
- $5.5 million for small manufacturers, or …
- $5.5 million for small businesses that reduce their energy consumption by 10% or generate renewable energy
- The 504 loan may not exceed 40% of the Total Project Cost
- No more than 50% of the financing can come from Federal sources
LOAN TERMS
- 20 years for real estate / Bank’s portion must be at least 10 years
- 10 years for equipment loans / Bank’s portion must be at least 7 years
JOB CREATION
- 1 new job must be created or retained for each $65,000 debenture or $100,000 for manufacturing, unless the project meets one of the Public Policy goals
PUBLIC POLICY GOALS
- Business district revitalization or enhanced economic competition
- Expansion of exports
- Expansion of minority, woman, or veteran-owned enterprise (51% or more ownership)
- Rural development
BUSINESS SIZE STANDARDS (including affiliates)
- Tangible net worth less than $15.0 million
- Average net profit less than $5.0 million for the past 2 years
LEASING / OCCUPANCY REQUIREMENTS
- If the project involves the purchase of an existing building, the borrower must occupy at least 51% of the facility. The remaining 49% may be leased permanently.
- For new construction borrower must occupy 60% immediately, and an additional 20% within 3 years. The remaining 20% may be leased out permanently.
- None of the “504” loan proceeds may be used to make tenant improvements to the portion of the building to be leased.
ELIGIBLE BUSINESSES
- For-profit corporations, partnerships, and proprietorships
- Owners must be U.S. citizens or legal permanent residents
INELIGIBLE BUSINESSES
- Certain Passive income businesses (e.g. – apartments)
- Financial institutions
- Non-profit businesses
ELIGIBLE USES OF LOAN PROCEEDS
- Purchase of land, building, machinery, or long-term capital equipment
- Purchase land and construct new building & improvements
- Purchase and Renovation of an existing building
- Improvements or addition to existing building
- Limited refinancing available. (see additional information)
- Specialized equipment, such as commercial fishing vessels and heavy-duty earth moving equipment may be eligible
INELIGIBLE USES OF LOAN PROCEEDS
- Working capital
- Goodwill purchase
- Inventory
- Rolling stock such as cars, trucks, buses, or airplanes