Discover more about the SBA Advantage (504) loan, more commonly referred to as an SBA 504 loan or the Community Advantage loan. This type of commercial business loan is available for small business in need of capital to start or grow their business. Currently it is available in most of the states nationwide. but not all. More information provided at the end of the article.
Are you looking online for information about starting your own business and have a need for cash to do it? Review this webpage and I will go over what this loan is, who it is for and what some of the terms of the loan are like lending guideline requirements for the SBA Advantage (504) loan.
A restaurant or other types of small local retail businesses, for example can greatly benefit from this type of SBA Advantage loan because it could be a wonderful way to get money for inventory and provide a business with needed cash flow that will help ensure the future success of the business.
Several small business owners or entrepreneurs may not know off hand about this particular loan product and generally will seek funding with alternative type lenders, who typically charge high interest rates and possible points too. The SBA 504 from the Small Business Administration provides a better way to seek funding for a business and it carries a government guarantee.
Most small business SBA loan requests usually start at a bank. Banks maintain a conservative portfolio and are known to be risk adverse, particularly with new small businesses that want to borrow less than $250,000.
Many small business owners have a difficult time trying to find money (a loan) for their business because of possible factors like tight cash flow, low credit scores, highly leveraged and limited industry experience. The SBA 504 could be a solution. Contact us here at commvestor.com and we will help you if you feel this type of loan may be what you need.
The amount of money available to be borrowed from the Community Advantage program varies from state to state and the type of qualified project you need funding for. These funds are available to be used for business acquisitions, tenant improvements, equipment and capital. Unlike the alternative lending program rates who may charge 12% to 14% or whatever… The interest rate for this loan program at time of this writing is around 6% and includes a low down payment and fixed, long-term interest rate which could help make real estate ownership a reality.
I’d like to point out principals of businesses are able to utilize 504 loan to purchase a building or even land. The SBA 504 can even be used for renovation or new construction projects, , leasehold improvements and purchases of heavy machinery, equipment and commercial vessels.
Some of the underwriting and eligibility of this program include full documentation income verification, a down payment and credit score of at least 675, subject to change if underwriting guidelines change. Ask a commercial loan officer for details. The SBA Advantage (504) loan carries a Twenty five year Amortization period / twenty year term for real estate and up to 10 years for equipment (depending on the useful life of the equipment) and generally up to seven years for working capital.
Ineligible locations (by state): AL, FL, IN, LA, MA, ME, MI, NJ, OK, OH
SBA loan underwriting guidelines and rates are subject to change. All loans require qualification and approval.