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. Contact LiftFund for more details.