Why an SBA loan?

The SBA 504 loan program allows you to offer your small business clients loans at competitive interest rates and terms that generally may be limited to larger more established business clients. Your client gets up to 40% of the project financed at a long-term lower fixed rate. You are able to better manage risk and be in position to offer other products and services your client will likely need as the business grows.

Low Down Payment

504 loans require between 10% and 20% down. Up to 90% financing allows the business owner to preserve working capital for expansion.

Low Fixed Rate

504 loans utilize fixed rates that are usually 1% to 2% less than conventional financing.

Low Monthly Payments

Small businesses pay low monthly loan payments by utilizing 15 to 20 year amortization schedules from a first mortgage lender.

How is an SBA 504 project typically structured?

BEFCOR provides up to 40% of the total project cost with an affordable, fully amortized fixed-rate loan. The participating lender normally finances 50% of the total project cost with the borrower typically contributing as little as 10%.
Typical $2,000,000 real estate project:

% Source of Funds Project Cost Interest Rates Amortization Collateral
50 Lender $1,000,000 Fixed or Variable 20 years 1st Trust Deed
2nd Trust
40 BEFCOR $800,000 Fixed 20 years Deed
10* Borrower $200,000
Total $2,000,000

*Start-up OR Special Purpose Building requires 15% equity.
Start-up AND Special Purpose Building requires 20% equity.