Another of the Small Business Administration’s popular loan programs is called the SBA 504 loan. In a nutshell, the SBA 504 loan program is a long-term loan set with a fixed rate at 10-percent down. Know that it has the government-backed guarantee you desire and the terms and rates your small business needs to keep from a crippling small business loan without this vitally important protection. At SBALoanOnline, we provide SBA 504 loan services in Kitsap County and have developed a quick and easy process so you don’t have to worry about how to navigate the government’s sometimes tricky and confusing process.
SBA 504 Loan Companies Near Me In Kitsap County Washington
Keep in mind, one of the primary reasons for owning your own business is to control your own business and personal fate, so don’t get into a loan or financial situation where you’re tied to rates and terms that tie you down. Let the highly skilled and trained experts at SBALoanOnline help you understand the SBA 504 program and how it can help you expand your capital access in the most financially friendly terms and rates. We’ll work tirelessly for you the moment you reach out to us for assistance. Each of our team members has tons of experience with SBA loan programs.
Get A SBA 504 Loan Today – (424) 343-1099
So if you’d like more information about the SBA 504 loan program and would like to obtain one today, call the nationwide experts at SBALoanOnline. One of our friendly and knowledgeable associates in Kitsap County WA is standing by right now to answer any question and get your application ready to roll, so to get a SBA loan now, call us at (424) 343-1099.
Qualifying For a SBA 504 Loan
The SBA 504 Loan is a program that also includes a neighborhood advancement corporation in Kitsap County. The loan is preferably ideal for a small company that is interested in building or buying their owner-occupied commercial real estate.
The program works by bringing two lenders together to fund the purchase of industrial real estate. Normally, these two lenders are the CDC and a standard lender or bank.
These arrangements work where the bank loans the customer up to 50 percent, CDC loans up to 40 percent while the customer chips in the 10 percent typically as a cash deposit.
Loan Requirements for a SBA 504 Loan
There are 2 main requirements that your organization in Kitsap County WA must satisfy in order to receive a SBA 504 loan. These include having a credit rating of 680 plus and a capability to make a 10 percent down payment for the project.
Besides the two, you will have to not have the needed financing form other source or be involved in the real estate rental investment.
Your business in Kitsap County WA will have to have a substantial net worth of less than $15 million, have the ability to make the loan payment on time from the expected operating cash flow from business as well as inhabit 51 percent of the building.
SBA 504 loans are therefore ideal for any organization that is interested in the purchase of commercial property and can guarantee 51 percent occupancy of the area while renting out the remaining 49 percent.
Loan Terms and Interest Rates
The two various types of loan— from the bank and the CDC– that make up the SBA 504 Loan usually have different terms, limits, rates, and fees.
The rates integrated comprise the overall loan rate on your CDC/SBA 504 Loan.
Usually, your company will pay an interest rate of in between 4 and 6 percent on the whole loan with a repayment length of 25 years.
The SBA sets a limitation on the terms, costs and interest rates that is given by the CDC which covers 40 percent of the whole project expense.
With a 10-year CDC loan, the fixed interest rate will be about 4.67 percent with a 20-year one having a fixed interest of 4.95 percent.
Conventional SBA 504 Loan Lenders
While the SBA sets the limit on the CDC loans, it does not do the same for the traditional lenders such as banks or other financial institutions which leaves space for negotiations for the loans.
However, the rates of interest are usually between 5 and 9.5 percent with a reset point. The loan amount for a SBA 504 loan is typically around $14 million.
Because borrowers can take on numerous 504 loans for multiple reasons, the loan amount can increase to $20 million.
As a company, if you are not interested in getting funding from a CDC, your finest alternative is the SBA 7a loan.
Requesting a SBA 504 Loan
The SBA 504 loan application is similar to that of the SBA 7a loan in terms of the amount of time and documentation needed to get the financing.
Additionally, your business will have to give additional documents on the commercial property that is being funded.
In any case, consider an appropriate amount for your organization and whether you can fulfill your lenders’ needs.
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