Exposing the Myth: SBA 504 Loans Have Too Many Fees

Just like the myths that SBA 504 loans have too much paperwork and take too long to process, you have probably heard that 504 loans have too many fees. This myth most likely originated from the 7(a) program's tiered fee structure and has been applied to all SBA loan programs. Let's examine the facts about 504 loan fees.

What to Look For When Choosing a CDC

We have discussed many aspects of an SBA 504 loan, including why the SBA established the Certified Development Corporation Program to provide 504 loans to businesses. All 504 loans use a CDC to provide the SBA guaranteed portion of the loan.

Even though all CDCs must adhere to SBA regulations, not all CDCs are the same. Choosing the right CDC to partner with your bank in making a 504 loan can make a huge difference in your loan process experience.

Exposing the Myth: SBA 504 Loans Have Too Much Paperwork

When you think of government agencies, such as the SBA, you probably imagine mountains of paperwork. In fact, many lenders actively avoid promoting SBA 504 loans from fear of endless forms. Fear not! The SBA has taken great strides in reducing the number of forms needed to apply for a loan.

Exposing the Myth: SBA 504 Loans Take Too Long

There is a prevailing myth that an SBA 504 loan takes too long to prepare and process. While it is true that in the past the SBA was bogged down with laborious paperwork and sluggish processes, many things have changed. The SBA has worked intently to speed up their processing times and reduce their paperwork. The agency has invested in the technology to become more efficient and responsive. They really do want to make it easier to provide borrowers with the capital they need to promote economic growth.

5 Reasons an SBA 504 Loan Should Be Your First Choice

Quite often, when a company needs a business loan, their first step is to contact the lender where they do all their business banking. They inquire about a conventional or traditional commercial loan. As the name suggests, this is the most common type of commercial loan. The company feels comfortable using a familiar lender and receiving a familiar loan. However, quite as often, this is not the right loan. There is a better way: The SBA 504 loan program.

How to Create a Business Plan for an SBA Loan

One of the first things a potential lender will ask to see is your business plan. If you are looking for business financing, a business plan is imperative. It will be impossible to secure an SBA loan without one. Given its importance, a business plan should be regarded as a formal document that is honest and detailed.

Preparing for an SBA Loan

Many small businesses use an SBA loan to finance a start-up venture acquire working capital, pay for a building expansion, or purchase new machinery or equipment. Applying for an SBA Loan requires forms and documentation just like any commercial loan. The lender will have the same expectations and you should be prepared to describe your business, how you will use the loan proceeds, and establish an ability to repay the loan.