Lending Power | Loan Programs & Leadership for small business

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SBA 504 Current Rate:

4.635%

View Rates

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The Basics 

By providing long-term fixed-asset financing to small businesses, the SBA 504 Loan Program:

  • Encourages local economic development
  • Helps to create and retain jobs
  • Has the lowest default and loss rate of any of SBA’s financing programs



Advantages


90% FINANCING

  • Conserves valuable operating capital
  • The minimum 10% down payment is 10% – 20% lower than the equity requirement for a conventional loan
  • Soft costs can be part of a SBA 504 loan package and may include:
    • Architectural & engineering fees
    • Appraisal & environmental assessment costs
    • Title search
    • Title insurance costs
    • Interest on bridge financing


LOW FIXED RATE

See the most current rates.


LONGER PAYMENT TERM

  • For real estate purchases, the SBA 504 Loan will have a full 20-year term with no balloon; the third party lender’s loan must have a term of at least 10 years.
  • For machinery and equipment purchases, the SBA 504 Loan will have a full 10-year term with no balloon; the third party lender’s loan must have a term of at least seven years.


COLLATERAL REQUIREMENT

  • For established businesses where cash flow is adequate, collateral is generally limited to the assets being acquired with the SBA 504 Loan (i.e. real estate and/or machinery and equipment).
  • Personal residences and other business assets (inventory, accounts receivable) can remain available for future financing needs.


HOW A SBA 504 IS STRUCTURED:

  • CIC partners with a bank or other “third party lender” to provide financing for up to 90% of the borrower's project.
  • The third party lender typically finances 50% of the project and secures its loan with a first position lien on the asset(s) being financed: the real estate and/or equipment.
  • CIC finances an additional 40% of the project using the SBA 504 program, and secures its loan with a second position lien on the asset(s) being financed.
  • The borrower funds the final 10% from business or personal assets or subordinated debt: the equity injection.

 

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Get the financing to grow powerful ideas.

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CIC is an economic development lender contributing financial expertise and practical guidance to small business entrepreneurs in Connecticut and Rhode Island who have powerful ideas and need more power to grow them.