capital

The great news for business owners is that Community Business Finance's 504 Loan Program usually requires only a 10% down payment. In other words, the borrower's contribution is 10% of the total project cost. This percentage certainly makes financing more accessible for companies that need funds for real estate or equipment.

We are frequently asked about qualifying sources for the down payment, and have provided some answers below. More information can be found in our FAQ.

Did you know that Community Business Finance's 504 Loan Program usually requires only a 10% down payment? That's right! The borrower's contribution is just 10% of the total project cost. This percentage is designed to make financing more accessible for small businesses that need funds for real estate or equipment.

We are frequently asked about qualifying sources for the down payment, and have provided some answers below. More information can be found in our FAQ.

The great news for business owners is that Community Business Finance's 504 Loan Program usually requires only a 10% down payment. In other words, the borrower's contribution is 10% of the total project cost. This percentage certainly makes financing more accessible for companies that need funds for real estate or equipment. However, we are frequently asked about qualifying sources for the down payment. These answers and more can be found in our FAQ.

The first 4 Cs of Credit – character, capacity, capital, and collateral – all deal with a company's financial history or current state of affairs. One would think a clean past and current financial strength would make lenders eager to produce a 504 loan, or any business loan. However, lenders are also concerned with the future, and how the future economic outlook may affect your business.

Today's topic is collateral, one of the 5 Cs of Credit that lenders use to determine their level of risk when offering a 504 loan, or any business loan. You may be thinking, "I've checked my credit reports and made sure my character hasn't been damaged. My business has good cash flow (capacity), and I've got plenty of skin in the game (capital). What more could a lender want?" Lenders do want more; they want collateral.

To better understand capital, and its role in the 504 Loan Program, we must first explore the relationship between risk and return. This relationship is a fundamental idea in finance. Investors risk their money when buying stocks, on the chance of a reward in dividends. Lenders take a risk when loaning money to a business. The return on their risk is the interest paid on the loan.