What you need to know about loan programs
Let us help you to fulfill your business dreams and goals. We’ve helped medical and dental offices, manufacturers, agribusiness, restaurateurs, retailers and hundreds of other businesses acquire specific equipment and commercial real estate to suit their individual needs
For businesses, the SBA 504 loan program is the smart and cost-effective choice. The SBA’s 504 loan program can help buy real estate, purchase new equipment, and expand the existing space of your small business. You can put as little as 10% down to preserve both working capital and personal liquidity.
Advantages of 504 Financing
- 90% financing – Preserve working capital for business growth and expansion
- Long-term amortization means low monthly payments – Buying is often more cost effective than leasing
- Below-market, 25-year fixed interest rate – Fix occupancy costs and secure a stable location for your business
- Fixed or adjustable rates available on the First Mortgage
- Title to the building can be taken by the business, the principals individually, a holding company, or a trust
- No balloon payments
You’ll have the peace of mind to operate your business without worrying about rising rates or a balloon payment on our portion of your project debt.
Are you looking for ways to become more energy efficient? Learn about the Green Loan program.
Do you operate a business in Stanislaus County? Learn more about the Stanislaus County Revolving Loan Fund which provides loans designed as gap financing to meet the capital needs of eligible Stanislaus County businesses.
Compare Your Different Options
Small businesses generally have three primary options when it comes to financing real estate and fixed assets for their business. To help you make the right choice, we’ve provided a Pros & Cons comparison chart below so you can see the differences.
Two of the options are SBA programs (504 & 7a) and the third is done directly by a Bank. As a borrower and lender, it is important to understand what the pros and cons of each option are before choosing the best to fit the specific needs of your small business. In our opinion the SBA 504 program is the best financing option for small business to purchase real estate.
| SBA 504 | SBA 7(a) | Conventional | |
|---|---|---|---|
| Down Payment | 10% minimum | 15% minimum | 25% minimum |
| Maximum Project Size | No maximum | $5 million | No maximum |
| Interest Rates | Below-market, FIXED for full term (25 years) | Typically variable | Varies by lender |
| Fees | Finance, included in SBA loans, approximately 2.15% | Paid out-of-pocket 3.0%-3.75% | Paid out-of-pocket approximately 1% |
| Collateral | No additional collateral required | Additional collateral typically required for 90% financing | Typically no additional collateral required |
| Prepayment Penalty | Yes, for first 10 years, declining each year | Yes, typically in first three years | Varies by lender |