Who is Eligible for a SBA 504 Loan?
In a word: Small Businesses!
Eligible Businesses:
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Organized as for-profit
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Existing businesses in business for at least two years as well as some start-up businesses
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Businesses must have a tangible net worth of $20 million or less (including affiliates) and their average net profit after tax cannot exceed $6.5 million (average last two years)
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Business owners must be U.S. citizens or resident aliens
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Ineligible Businesses:
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Non-profit businesses
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Businesses engaged in any illegal activity
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Businesses deriving more than one-third of gross annual revenue from legal gambling activities
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Businesses primarily engaged in the business of lending (banks, finance companies, investment companies, life insurance companies)
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Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds
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Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting
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What are some of the Permitted Uses of 504 Loan Proceeds?
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Acquisition of land and building
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Acquisition of vacant land for construction of building
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Construction of building
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Renovation of building; addition to building
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Acquisition of heavy duty machinery and equipment
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Refinancing of qualified debt (with or without expansion)
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Associated soft costs: appraisal fees; environmental reports; closing costs; architects fees; permits; surveys; installation of machinery and equipment; points on interim loans; small amounts of furniture and fixtures; etc.