Self-Help 504 Lending Program

Certified Development Company of the Year" in 2009, 2007, 2005 http://www.self-help.org/business-and-nonprofit-loans/sba504loans The SBA's 504 program is a partnership between the SBA, Self-Help Ventures Fund and banks or other commercial lenders. It offers small businesses low long-term, fixed-rate financing for commercial real estate and equipment. Projects range up to $12 million for manufacturers, with a little as 10 to 20 percent owner equity investment, typically in cash or land.

504 Loan Benefits to Small Business Borrowers:

-Low down payment (as little as 10%) doesn't deplete cash on hand. So you conserve working capital, grow faster and create more jobs
-Longer repayment terms reduce your monthly payments
-Fixed interest rate on SBA loans, usually at below-market rates -- means no future rate fluctuations

504 Loan Benefits to Lenders:

-Lower Risk
-Hold first lien position
-Lend 50% of project costs
-SBA provides subordinated financing
-Grow Your Portfolio
-Expand existing relationships
-Add new clients with broader lending ability
-Increase Your Competitive Edge
-Provide your small business clients up to 90% project financing
-Self-Help handles all SBA paperwork and answers SBA-related questions from the borrower from approval to servicing the loan

Advantages of getting a SBA 504 loan:

-Low down payment (as little as 10%) doesn’t deplete cash on hand – allowing you to conserve working capital, grow faster and create more jobs
-Longer repayment terms, reducing your monthly payments
-Fixed interest rate, usually at a below-market rate, means no future rate fluctuations

Maximum sizes of the 504 loan:

-$1.5 million for standard 504 loans
-$2.0 million for loans that meet SBA public policy goals (woman-, minority-, veteran-owned or rurally located businesses)
-$4.0 million for loans to small manufacturing businesses

Eligible Borrowers:

-For-profit corporations, LLCs, partnerships, or proprietorships
-Financing project located in North Carolina
-Net worth less than $7.5 million and average net profit not above $2.5 million in last two years
-Project creates new jobs
-Primary occupant of the property financed
-Eligible Projects:
-Owner-occupied real estate:
-Build from scratch
-Buy existing building – including renovations
-Expand an existing building
-Heavy-duty equipment or machinery: minimum 10-year useful life
-Related soft costs (architect fees, construction interest, legal fees (surveys, appraisal, etc.)
-"Combo" projects: real estate plus equipment