Smarter SBA 504 Financing
Our SBA 504 loan product is one of the best financing options available in the market for specific scenarios. It has undergone major positive changes due to the Small Business Jobs Act (Bill 5297). The new program now allows for refinancing, which was previously only applicable for purchases. With a maximum loan amount of $12 million, including both the first and second lien position loans, it is a highly competitive product in the market.
The SBA 504 loan offers a low down payment of only 10% and amortization periods up to 25 years. It also has some of the lowest fixed interest rates in the business, making it an attractive option for businesses.
This program is essentially two loans, with the first lien position loan funded by a conventional bank and the second lien position note funded by the CDC or SBA. The CDC segment is fixed and amortized over 25 years, with fixed periods ranging from 3, 5, 10, and 25 years. The conventional bank loan covers 50% loan to value (LTV), while the CDC loan covers 40% LTV. The borrower contributes the remaining 10% via the down payment.
The SBA 504 program has a unique way of calculating the down payment, which sets it apart from most conventional loans. The down payment is calculated based on the “total project cost,” which includes fees such as closing, third-party, and renovation costs. In contrast, most conventional bank loans calculate the down payment based on the purchase price, with all other fees and costs added to the down payment. This substantially increases the amount of capital borrowers have to contribute.
With our extensive experience and resources, USPF is the only financial resource in the lending industry that guarantees a smarter financing solution through our SBA 504 loan program. Our smarter SBA 504 Loan helps businesses purchase commercial real estate, keep more cash in the business, and offers long-term fixed rates with the lowest down payments in the business.
Benefits & Program Highlights
- Available in all 50 states
- Minimum credit score preferred at 650 (and lower with reasonable explanation)
- Loan amounts up to $12 million
- Low down payments start at 10%
- 24-hour pre-approval
- Business must occupy 51% or more of the property
- All property types allowed
Terms of First Mortgage (Conventional Bank Loan)
- 50% LTV
- 25 years, fully amortized, fixed term
- Fixed, floating and adjustable rates are available
- Competitive fee structure
- Prepayment penalty applies & is set based on various factors
Terms of Second Mortgage (CDC/SBA Loan)
- 40% LTV
- 20 years, fully amortized, fixed term
- Fixed-rate is determined at SBA-guaranteed 504 Debenture sale
- Fee set by CDC
- Prepayment penalty for initial 10 years, none after the end of year 10
With our wealth of experience and resources, USPF is the sole financing source in the industry that assures a more intelligent financing solution. No other bank or lender makes this commitment. You can rely on USPF to be your trusted personal financing consultant.