SBA 504 Guaranteed Loan Program To Purchase Real Estate Explained

SBA 504 Loan Program

The SBA 504 guaranteed loan program to purchase commercial real estate is comprised of two loans. One provided by an SBA Preferred Lending Partner and another by an SBA Community Development Corporation (CDC).

Generally, multi-purpose properties may be financed up to 90% loan to value while special purpose properties may be financed up to 85% loan to value.

Loans are fully amortizing, with relatively long prepayment penalty periods, low fixed rates and no covenants on the CDC portion which means that as long as the loan is paid as agreed there is no concern of the loan being accelerated or called.

Fees are approximately 3% of the guaranteed portion of the CDC loan and may be financed.

The 504 program should be used for strong credit clients seeking long term, low fixed rates options who are not planning on moving, growing beyond their square footage or selling their business within the next ten years from purchase.

My SBA Loan Pro

The My SBA Loan Pro Podcast is hosted by Your SBA Loan Pro, Ryan Smith. In each episode Ryan provides valuable information and best practices regarding the SBA loan program.

Each episode is approximately one minute in length and addresses topics related specifically to SBA 7(a) and 504 loan programs to purchase real estate, acquire a business or franchise and obtain working capital.

You’re encouraged to listen and subscribe to ensure you’re notified each time a new episode is available. Ryan publishes a new episode weekly on Tuesday mornings, unless he’s kidnapped to a deserted island of course.

You can listen and subscribe on your favorite platforms including Apple Podcasts, Spotify, Google Podcasts, Anchor and Stitcher.