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Businesses Qualify For SBA-504 Loans

[ 0 ] Apr. 1, 2014 | SBO Editor

SBA-504 loans

Changes will open the door for more small businesses to qualify for SBA-504 loans.

More small businesses will soon be able to qualify for SBA-504 loans to buy commercial/industrial buildings, according to CDC Small Business Finance.

On April 21, the Small Business Administration (SBA) will eliminate provisions that prevented small business owners with a high-net worth to purchase commercial real estate with SBA-504 loans. The SBA-504 loans can also help business owners buy and install heavy machinery and equipment.

The SBA-504 Loans

“These new changes will allow more small business entrepreneurs to take advantage of SBA-504 financing to buy or construct their facilities,” said Kurt Chilcott, president and CEO of CDC Small Business Finance, the largest SBA-504 lender in the U.S. “Helping more small businesses grow will help create more jobs and, as a result, improve the economy.”

SBA-504 loans appeal to small business owners who are tired of paying rent and want to build equity for themselves. SBA-504 loans allow entrepreneurs to access low-fixed-rate, 20-year financing of over $20 million with a minimal down-payment (10%). Rates have been averaging 5.4% over the last nine months.

San Diego-based MachineTek, a manufacturer of aerospace/defense industry components, is poised to take advantage of SBA’s new rule changes. CDC Small Business Finance has structured a $2.4 million SBA-504 loan that to help MachineTek’s owner buy a 21,000 sq. ft. building. He will save $2,000 a month by owning rather than leasing.

Additional advantages of SBA 504 Loans include:

  • Preserving cash
  • Tax savings
  • No additional collateral required
  • No balloon payments

To qualify for an SBA 504 loan, businesses must be:

  • Owner-operated
  • For profit
  • Organized as a sole proprietorship, corporation, partnership or LLC
  • Have a business net-worth below $15 million and a net-profit after taxes below $5 million within the last two operating years

CDC Small Business Finance is the nation’s leader in helping small businesses secure SBA-504 loans.

Small business owners can find out if they can qualify for a SBA-504 loan by using the company’s Prequalify Today tool. For more information, small business owners can call 800.611-5170 or visit www.cdcloans.com.

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Category: Features