SBA 504 Program Overview

The SBA 504 loan program provides small businesses long-term, fixed rate financing to acquire major fixed assets for expansion or modernization. Projects are secured by a 1st and 2nd Deed of Trust / Mortgage on General and Special Purpose commercial real estate, meeting SBA qualifications, having a maximum aggregate Loan to Value of 90%, depending on program parameters.

Typical Program Structure:

■50% LTV Conventional 1st DOT / Mortgage
■40% LTV SBA/CDC 2nd DOT / Mortgage
■10% Equity Injection


Maximum Loan Amount: 1st DOT / Mortgage – $5,500,000

Rate Options:

■Adjustable
■Three (3) and Five (5) Year Fixed Loan Terms Available
Maturity & Amortization: Up to 25 Years

SBA 504 Program Eligibility:

The Small Business concern must be operated for profit and fall within the size standards set by the SBA (Tangible Net Worth LESS than $15 Million and Average Net Income DOES NOT EXCEED $5.5 Million after taxes for the preceding two years). Loans cannot be made to businesses engaged in speculation or investment in rental real estate.

Eligible Property Types:

■Office: Professional, Condominium, Co-Op, Medical, Dental, Veterinary
■Special Purpose: Assisted Living Facilities / Adult Care, Day Care Facilities, Senior Care Facilities
■Continuing Care Centers, Ambulatory Surgical Centers, MRI Centers, Diagnostic or Labs


Use of Proceeds:

■Purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping
■Construction of new facilities or modernizing, renovating or converting existing facilities
■Purchasing long-term machinery and equipment


NOTE: The 504 Program cannot be used for working capital or inventory.

Maximum Debenture:

$5,000,000 when meeting the job creation criteria or a community development goal

$5,500,000 when meeting a public policy goal

$5,500,000 for small manufacturers

Debenture Rates / Fees:

Interest rates on 504 loans are pegged to an increment above the current market rate for five-year and 10-year U.S. Treasury issues. Maturities of 10 and 20 years are available. Fees total approximately 3 percent of the debenture and may be financed with the loan.

Tell us about your goals, and we will help you understand the strategies you should consider. Contact us at 1-800-324-8808 or by email at mark@capital4healthcare.com.