Eligibility

The 504 loan provides mortgage loan to small to mid-sized businesses. It is available to individual business owners or multiple owners partnering on a project.

  • The business and any affiliate companies must have a net worth of less than $7 million
  • The average net profit of the business cannot be more than $2.5 million after taxes in the last two years
  • The business must create and/or retain jobs and/or meet one of the following SBA Public Policy goals:
  1. Expansion of an export business (at least 10% of last year’s sales must be from export sales)
  2. Expansion of a minority owned business (at least 51% ethnic minority interest
  3. Women owned
  4. Veteran owned

What are the occupancy requirements for the business?

  • 51% if acquiring an existing facility (49% can be permanently leased out).
  • 60% for a new construction project with the potential that the business will occupy some additional space within three years, and a total of 80% within ten years. The balance of the building (20%) can be permanently leased out.

How much of an Equity contribution is required for an SBA 504 Loan?

  • Commonly 10%
  • If the entity is considered a new business or the property is determined to be a Special Purpose Property, an additional 5% equity is required.

Eligible borrowers:

  • For-profit businesses
  • Tangible net worth no greater than $15 million
  • Average net profit after taxes no greater than $5 million for the most recent two years
  • Multiple businesses partnering to occupy the same building
  • Must meet at least one goal involving job creation, or public policy or community development through the business’ expansion project.

Examples of businesses served:

  • Auto repair shops
  • Attorney Practices
  • Car washes
  • Childcare centers
  • Dental offices
  • Distribution centers
  • Hair salons
  • Heating and mechanical contractors
  • Hotels and motels
  • Internet companies
  • Law offices
  • Manufacturers
  • Medical offices
  • Public Storage
  • Restaurants and food service companies
  • Retail and wholesale companies
  • Veterinary offices
  • Warehouses

If you have any questions regarding the SBA 504 Loan Program, please call SFV-FDC at (818) 205-1770