The 504 Loan Program was created by the SBA to help small businesses meet their commercial real estate and equipment needs.
As a Certified Development Company (CDC), LiftFund administers SBA’s 504 Loan Program in Texas. This program is designed specifically to finance fixed asset acquisition such as:
- Purchase of existing buildings
- Purchase of land and land improvements
- Construction of new facilities or modernizing, renovating or converting existing facilities
- Purchase of long-term machinery
- Some furniture and fixtures
In addition, the 504 program can also be used to refinance existing debt that is:
- Outstanding for at least 2 years
- Owed by a business in operation at least 2 years
- Current on all payments for the last 12 months
- Originally used substantially (85% or more) to finance eligible 504 uses (see above)
- A non-federal loan
A typical 504 loan financing structure shows how LiftFund works in partnership with a participating lender (typically a bank) to finance a portion of the project. Most projects require a 50-40-10 split, but there are exceptions. An additional 5% equity will be required for new businesses and/or projects considered “special purpose”.
Advantages of the 504 Loan Program
- 90% financing
- Longer loan amortizations, no balloon payments (up to 20 years)
- Fixed interest rates
To qualify, an applicant must create or retain one job for every $65,000 financed by SBA or meet one of SBA’s community development or public policy goals.
504 Loans Available in Rural Areas
LiftFund is now serving rural communities located in New Mexico, Oklahoma, Louisiana and Arkansas. For a list of qualifying rural counties click here.
Contact our SBA 504 LiftFund team for more details!