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What is a 504 loan?

The SBA 504 Program is a program utilized to finance fixed assets for existing, expanding and start-up businesses in conjunction with another lender (usually a bank).

Louisiana Capital CDC, Inc. is a Certified Development Company authorized by SBA to provide permanent take-out financing when the project is completed and the loan is closed in accordance with Louisiana Capital loan covenants and restrictions.

Louisiana Capital works with the small business owner and lender to process, approve, close and service the SBA 504 loan. Funding is arranged by Louisiana Capital issuing a 10, 20 or 25 year bond that is sold to investors on Wall Street. These bonds are attractive to investors since they are fully guaranteed by the U.S. Treasury in the event a small business should default.

Typical Loan Structure

Businesses can obtain up to 90% financing. However, start-up businesses and projects with single purpose buildings will be required to provide a larger down payment.

Loan Amount

The lesser of $5,000,000 ($5,500,000 in certain situations) or 40% of project costs. 

Use of Loan Proceeds

Fixed assets including Land, Building, Equipment. 

Term of Loan

Real estate loans are 20 or 25 year term; machinery and equipment loans are 10 or 20 year term. 

Rate of Interest

Fixed interest rate usually below market. The rate on the 504 loan is set when the loan is "funded". This typically occurs 60 to 90 days after the completion of the project. 

Minimum Down Payment

Existing business 10%
Start-up business or single purpose building 15%
Start-up business and single purpose building 20% 

  • Collateral is typically a second lien on assets financed (land, building, equipment); allows other assets to be free of liens and available to secure other needed financing.

  • Personal or Corporate Guarantees 

  • Key Man Life Insurance


Loan fees and closing costs are eligible project costs and can be financed. 

What is a
SBA 504 Loan?
Why a 
SBA 504 Loan?
Who is eligible for
a SBA 504 Loan?
SBA 504 Loan
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