Frequently Asked Questions

What do I need to get started on the loan process?
How long does the process take?
What is the minimum and maximum I could borrow?
Can I finance working capital and inventory through the 504 Loan Program?
What do you mean by "long term fixed-rate financing"?
How much of my own money will I have to put into the project?
Is their a prepayment penalty?

What do I need to get started on the loan process?

Contact your local bank. Tell your loan officer you would like to apply for a SBA 504 loan through the Small Business Capital Corporation.

How long does the process take?

The process can be fairly quick. Once we have received a commitment letter from your bank and reviewed all documents, we will submit your application to SBA. We usually get an SBA authorization within 3-5 business days of their receipt of the application.

What is the minimum and maximum I could borrow?

There is no specific maximum project cost, however the SBA portion is limited to $5 million participation for most projects and $5.5 million for eligible manufacturing projects and renewable energy source projects. The minimum project size is $125,000.

Can I finance working capital and inventory through the 504 Loan Program?

Working Capital and Inventory cannot be part of the SBA 504 loan. Talk with your commercial lender about getting an additional loan or possibly a line of credit for this portion.

What do you mean by "long term fixed-rate financing"?

The SBA 504 loan program offers 10 or 20 year terms. Machinery and equipment are limited to a 10 year term. Real estate financed with machinery and equipment may be eligible for 10 year term or 20 year term. 504 rates are fixed during that time period and have historically been lower than commercial rates.

How much of my own money will I have to put into the project?

It all depends. 10% is the absolute minimum. Add 5% to that figure if you are a new business; if you are a new business financing a single purpose building add an additional 5%.

Is there a prepayment penalty?

Yes, if you prepay during the first half of the loan. Because the SBA 504 loan has a lower, fixed rate we suggest the first mortgage bank loan be paid down first. It usually has a higher, floating rate.