The SBA 504 loan program provides long-term, low interest, fixed-rate financing to small businesses for construction, purchase or renovation of facilities; or to acquire machinery and equipment. A 504 loan package is a combination of two loans, one from Wyoming Capital Access and a second loan from a commercial lender selected by the borrower.
How is an SBA 504 Loan Project Structured
504 loans for existing businesses are typically financed 50% by the participating commercial lender, 40% by the CDC, and 10% by the business borrower. For example, a $2,200,000 real estate project for an existing business might be structured as follows.
|Commercial Lender||Wyoming Capital Access||Business Borrower|
|Percent of Project||50%||40%||10%*|
|Term||Min 10 Years||20 Years||Equity|
|Interest Rate||Market Rate||Fixed Rate|
|Collateral||1st Mortgage||2nd Mortgage|
*Start-up business OR a Special Purpose building requires 15% borrower equity
*Start-up business AND a Special Purpose building requires 20% borrower equity
An SBA 504 Loan is a powerful business financing tool that enables successful businesses to grow:
- 90% financing preserves working capital for business expansion
- The borrower chooses the 1st Mortgage lender based on their terms and interest rates
- SBA loan fees are included in the 504 loan to reduce up-front cash outlay
- Fixed interest rate on the SBA loan (10 or 20 years) for life of the loan