The Biggest Benefits of SBA 504 Loans

 

 

Just as there are several different kinds of businesses, there are several different types of business loans. SBA 504 loans are offered by the Small Business Administration for small business owners who are in need of real property to establish their companies. 504 loans are becoming increasingly popular for small business owners across a variety of industries, and for good reason.

Good for the Goose, Good for the Business

While an SBA 504 loan is only for specific types of business owners, including women, minorities and veterans, it comes with several benefits. One of the biggest is that SBA 504 loans give entrepreneurs access to guaranteed loans they can use on buildings for economic development and for land. Another great thing about these loans is they are a great source of stimulation for local economies.

In regards to the terms associated with 504 loans, know that they are often more favorable than traditional commercial loans. One of the largest obstacles for small business owners is being approved for business loans, which can delay their business plans and growth potential indefinitely. A 504 loan from the SBA is a viable option, one that offers long-term financing with a fixed rate. Even though SBA 504 loans often present a massive benefit to small business owners, not all of them will qualify.

Current Qualifications

Before you apply for a 504 loan, know that you must be the owner of a business that has a tangible net worth of less than $15 million. What’s more is that you also have to have a net income less than a flat $5 million on average for the past two tax years. You can also expect the SBA to take a look at your activities as a business owner as well as the activities of your business. Specific types of companies that do not qualify for this specific type of loan include non-profits, those that deal in speculative activities and lending businesses.

If you feel your business qualifies for a 504 loan, the first thing you’ll want to do is reach out to your local SBA office in order that they can determine for sure if you qualify. Once that’s done, get in touch with a Certified Development Company and gather all of the documents you’ll need for the application process.

Learn more about SBA 504 loans by getting in touch with a knowledgeable business financing company. Being approved for such a loan could be the breakthrough you need to catapult your small business to the top.