SBA 504 Loan Program
The SBA 504 Loan program is a powerful economic development loan program that offers small businesses another avenue for business financing, while promoting business growth, and job creation.
The biggest challenge business owners face next to starting their own business is taking it to the next level. The SBA 504 loan program is especially designed to help small businesses at this stage. With financing available for up to 90% of the project cost for commercial real estate, the SBA 504 program offers small business owners the ability to conserve working capital and maintain operating needs.
The SBA 504 loan program offers small business owners affordable 20 or 25 year fixed rate financing through a partnership with a bank for real estate purchases and new building construction. The business must occupy 51% of an existing property to be financed or 60% of new construction. Additionally, the project must help maintain current employment levels or create additional jobs, unless a public policy goal is met.
- The purchase of existing building
- The purchase of land and improvements
- The construction of new facility or modernization, renovation or
conversion of existing facilities
- The purchase of long-term equipment and machinery
- The refinancing of debt in connection with an expansion of the business
through new or renovated facilities or equipment.
- Operate as a for profit company
- Has a tangible net worth less than $15 million
- Prior 2 years average after-tax net income under $5 million
- Be an eligible type of business
- Create or retain jobs**
- Not have funds available from other sources
- Good Character a “Statement of Personal History” is required from each principal
- Relevant management expertise
- Feasible business plan
** As an alternative to job creation or retention, a business may qualify if it meets a community development or public policy goal.
- Lower down payment
- Up to 90% financing
- Long-term, below-market fixed interest rates
- 20 or 25 year amortization on real estate loans
- Preserve working capital
- Predictable monthly payments
- No balloon payments
What Cascade Capital Funding Has to Offer
Cascade Capital Funding helps small businesses obtain the financing they need to realize their business dreams. We work with the business owner to complete the SBA 504 loan application and guide them through the entire process.
Oftentimes business owners find it difficult to get the financing they need to grow. Cascade Capital Funding plays a critical role in filling the financing gap for those businesses that face barriers to conventional bank loans and for those that want to preserve working capital.
The Loan Process
The first step to getting your SBA 504 loan is meeting with one of our qualified professionals.
To get the most out of your time be prepared with the following information:
- An estimate of the total project cost. Is new construction or renovation involved? Do you currently occupy the property?
- What is the businesses annual revenue? Be prepared to share your last 3 years financial statements and federal tax returns.
- What is the ownership structure? All owners with 20% or more interest in the business must provide a personal financial statement.
- What type of business are you operating? Be prepared to discuss management ability, strengths & weaknesses of the business, your competition, and your succession plan.
- How many employees do you have? Do you intend to add additional employees?
- Do you have a written business plan?
- Do you have a primary lender? Have you already applied for financing with another lender?
- Have you had government financing in the past?
Being prepared for the initial meeting will make the next step of preparing your application package move more quickly.
Please Note: To help the government fight the funding of terrorism and money laundering activities, Federal law requires all Certified Development Companies to obtain, verify, and record information that identifies each person who applies for a 504 Loan. We will collect the name, address, date of birth and other identifying information for all applicants of the SBA 504 Loan Program.
Once we’ve determined your project is eligible, we’re ready to start working for you.
We will work with you and your primary lender (bank or credit union) to prepare the application package for the Small Business Administration (SBA). We will use our knowledge of the program rules and regulations along with the information provided by you and your primary lender to create a complete package that will be submitted to the SBA for review and approval.
Once the loan package is complete we will forward it electronically to the SBA loan processing center for review. Our partners at the SBA will review the package and issue a formal loan Authorization after approval. The loan Authorization will have all of the loan requirements to move the loan to the funding phase.
Once the SBA has issued the loan Authorization, your primary lender will provide interim financing for the purchase of your land, building and equipment. Once the new construction or renovation of the building is complete and equipment is installed the loan package will be prepared by the CDC’s legal counsel and the loan officer will meet with the small business to review the package to be executed by all guarantors. The complete loan package will be forwarded to SBA legal for final review and funding will be scheduled. Funding typically occurs approximately 45 days after final review.
We will work closely with you and the lending institution you choose to facilitate and process your SBA 504 loan application. Our relationship with you does not stop there; we continue to service the SBA loan for the full term of the loan. Our staff offers personalized service and a single point of contact throughout the entire lending process.
The loan services we offer after funding include monitoring of monthly payments, prepayment estimation, guarantor and collateral release, loan assumption or subordination, and changes in your ACH account.
We are the people you call. We are here to assist you throughout the term of your loan.
Small Business Loan Program
Cascade Capital Funding also offers an in-house program for smaller business loans ranging from $25,000 to $50,000. We give preference to small businesses that have obtained other project financing from private or public lending sources.
Acquisition of real estate, machinery and equipment, inventory, furniture & fixtures and working capital may be financed through this program. All loans must be fully secured with business and/or personal assets and guarantees. Interest rate will be a minimum of 5% and may be either fixed or floating; rates will be set by Cascade Capital Funding at the time of application. Loan terms are 20 years for real estate and 10 years or less for all other purposes.
The borrower is responsible for all closing costs and a loan processing fee of $250 or 2% of the loan amount, whichever is greater. In addition, the borrower will a pay a $10 monthly servicing fee for the life of the loan. Credit requirements must be met. Cash flow, management expertise, credit history and collateral will be factors in determining loan approval.
For more information contact one of our lending professionals.