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SBA 504 Loans

Commercial Real Estate Loans for Business Owners

SBA 504 Loans help business owners purchase commercial property from which to run their own business.

SBA loans are long term loans guaranteed by the federal government. This federal guarantee feature make SBA loans very attractive to banks because it reduces the risk they have to a low 50% of the loan amount.

Lower risk for the lenders leads directly to better terms and lower rates for our borrowers.

The SBA 504 Loan Program is for the purchase of fixed assets such as commercial real estate and machinery and equipment of a capital nature, which are defined as assets that have a minimum useful life of ten years. Proceeds can not be used for working capital.

There are three parts to a typical SBA Loan structure:

  1. A Bank conventional first mortgage loan of approximately 50% of the purchase price of the assets.
  2. SBA fixed rate debenture/second mortgage loan of approximately 40% of the purchase price of the assets.
  3. Borrower contributes the remaining 10%. If the property is special use real estate, a 15% contribution is required by the borrower, and if the property is a special use and start-up operation, a 20% contribution is required. Special use properties are properties such as funeral homes, motels or assisted living facilities that can only be used for the purpose that they were built.

These loans provide the highest loan-to-project cost that is available on the market today. In addition to real estate and machinery, such soft costs as: title searches and insurance; closing attorneys' fees; appraisal fees; environmental report costs; architect and engineer fees; permits; surveys; impact fees; installation of machinery; small amounts of furniture and fixtures; and so forth are also able to be included in your loan amount.

You also get longer term financing so your monthly payments are kept to a minimum, and more of your cash flow is available to run your business.

K2 Commercial Finance works closely with several SBA Preferred Lenders and provides quick responses to SBA 504 lending requests on a national basis. Our expertise in SBA lending provides a powerful resource to assist with financing of the purchase or expansion of a business, equipment, or real estate. 

Click here for specif loan parameters for the SBA 504 Loan Program.

Click here to inquire about SBA 504 Loans 

If your loan requirements include refinancing or generating working capital for your business will likely require the SBA 7a Loan Program. Click here for details.

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