504 Loan Program

SBA 504 Loan Program

The SBA 504 Loan Program is designed to work in conjunction with commercial banks to provide 90% long-term, fixed-rate financing for small to medium sized businesses that provide employment opportunities to individuals.

Use of Proceeds

Purchase of land
Purchase or construction of owner-occupied building
Modernization, renovation, restoration of a building including leasehold improvements
10% contingency on a construction project
Purchase of equipment with life of 10 years or more
Other attendant soft costs such as accountants, engineers, appraisers, construction period interest, etc.

Ineligible Use of Proceeds

Working Capital
Debt consolidation or repayment
Inventory
Refinancing

Eligible Businesses

The applicant must be a for-profit corporation, partnership or proprietorship. The net worth of a business must not exceed $6 million, and the average net profit after tax must not exceed $2 million (average over the last two years). In labor surplus areas, standards can be increased by 25%.

Ineligible Businesses

Not-For-Profit Corporations
Lending Institutions
Gambling Concerns

Program Fees

CDC Processing Fee: Up to 1.5% of the 504 portion of the project.
Participation Fee: One time ½% fee to SBA on lender’s participation.
Other Program Fees: ¼% Funding Fee.
½% (compounded) Underwriting Fee.
SBA one time Loss Reserve of ½%.

All of the above fees are rolled into the 504 loan amount and financed over 20 years, allowing the small business to save on out of pocket costs and keep its cash for working capital. With the 504 Program, the attorney's fees can also be rolled into the loan and fully amortized over 20 years.

Application Process

If interested please (contact) the Granite State Development Corporation.

Application process (information) you will need to submit.