How long does it take to obtain approval for a 504 loan?
What is the minimum down payment required?
How much does a 504 loan cost?
What will be my interest rate on a 504 loan?
Is there a penalty if I prepay my loan?
Can I pay off my 504 loan early?
Can I personally hold title to Project Property and lease it to my business?
Will I need to personally guarantee the SBA 504 loan?
Will I need to pledge my home as additional collateral?
How can I find my current loan balance?
Can I refinance my 504 loan?
Is my 504 loan assumable?
What are the annual reporting requirements for my 504 loan?
Can I get a second SBA 504 loan?
How long does it take to obtain approval for a 504 loan?
SBA 504 Loans do not take longer to close than conventional loans. The key to moving the loan process forward in a timely manner is to provide the lenders with complete and accurate information, on the appropriate forms. The timing often depends on obtaining the appraisal and environmental reports as early as possible. Wyoming Capital Access routinely processes SBA 504 loans in 45 days.
What is the minimum down payment required?
A minimum down payment of 10% is required for most 504 loan projects. A 15% down payment is required when a business is a start-up (less than 2-years in operation) or when the project building is a special-purpose use. A 20% down payment is required in situations involving both a start-up business and a special-purpose use.
How much does a 504 loan cost?
SBA 504 Loan Program fees are less than 3% of the loan amount. Contact us for details.
What will be my interest rate on a 504 loan?
The interest rate on the loan will be determined by a market sale of the bond at the time the 504 debenture pool (the pool of 504 loans) is sold. The interest rate is fixed for the term of the loan. It is this 100% government guarantee that experts predict will enable the bond to be funded at below conventional lending interest rates and on a fixed rate basis.
Is there a penalty if I prepay my loan?
Yes, although the amount of the prepayment penalty decreases each year and disappears after year five for a 504 loan with a 10-year maturity and after year 10 for a 504 loan with a 20 or 25 year maturity. Call us and we will assist you through the prepayment process.
Can I pay off my 504 loan early?
Yes, “pre-payment” of your entire 504 loan balance is possible; however, advanced payments and partial payoffs are not allowed. The SBA has established specific procedures that must be followed for early payoff of your 504 loan. Call us and we will assist you through the prepayment process.
Can I personally hold title to Project Property and lease it to my business?
Yes. SBA allows for individuals, trusts, LLCs, corporations or partnerships to hold title to the Project Property so long as it is leased to the Operating Company.
Will I need to personally guarantee the SBA 504 loan?
SBA requires a guarantee from all individuals and legal entities that hold a 20% or more ownership interest in either the Project Property or the Operating Company.
Will I need to pledge my home as additional collateral?
No. For most projects the Project Property will be the sole collateral securing an SBA 504 loan. Additional collateral is only required when there is a deficiency in the appraised value of the Project Property or when other serious credit issues are apparent.
How can I find my current loan balance?
If you still have the amortization schedule provided at loan closing, the document will help you determine the current loan balance. If you do not have the schedule, call us and we can give you the current balance and fax or e-mail a copy of the amortization schedule to you.
Call us to discuss current refinancing options.
Yes, but only after the loan has aged four years and under certain conditions. Call us and we will be happy to discuss the specific eligibility and requirements.
What are the annual reporting requirements for my 504 loan?
On an annual basis, you are required to provide:
- Evidence of insurance on the property securing the 504 loan.
- Annual business tax returns and/or financial statements and personal tax returns are required each year no later than three months after your fiscal year ends.
- On the second-year anniversary of your 504 loan, you are required to provide the current number of employees (full-time equivalent) employed by your business; this is a one-time requirement.
Can I get a second SBA 504 loan?
Yes. You can have more than two SBA 504 loans. The number of loans is not the limiting factor; it is the amount of your total SBA indebtedness. For new 504 loan purposes, the aggregate SBA indebtedness may not exceed $5.0 million for general small businesses, and $5.5 million for small businesses engaged in manufacturing.
The $5.0 million SBA indebtedness cap for general small business may be exceeded with an SBA qualified Energy Savings Loan. See Loan Programs for details.