Many lenders believe they have to be a certified SBA lender to offer any SBA loans. The truth is that the SBA does not require a lender to be certified to participate in the 504 Loan Program because these loans require partnership with a Certified Development Corporation. CDCs, such as Community Business Finance, are nonprofit organizations certified by the SBA to provide 504 loans to small businesses statewide.
Community Business Finance's 504 Loan Program is specifically designed for purchasing property or equipment with a low fixed interest rate and as little as 10% down. However, the SBA classifies some properties as a "special purpose property," which requires a 15% down payment on 504 loans. Even though borrowers planning to buy a special purpose property should be prepared for this additional expense, it can still be a much lower down payment than conventional lenders require.
When searching for business financing, there are many aspects of a loan that can vary widely from one lending institution to the next. Interest rates, amortization schedules, and fees are just a few of the conditions that differ between offers. Down payment requirements can range from 10% all the way to 25 or even 30%! Borrowers might expect this from banks and commercial lenders, but differences can be found when comparing SBA loans, as well.
After 10 years in business, Community Business Finance has helped many different businesses with a variety of financial needs. However, one goal remains constant for each borrower: an affordable loan. We recently helped a business owner purchase a new facility that simply wasn't possible with a conventional loan.
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.
Community Business Finance is dedicated to borrower and lender education about the 504 Loan Program. Over the last 10 years, we've collected some of the more frequently asked questions from companies that we have proudly financed. These are five of the most common. For a more comprehensive list of questions and answers, visit our FAQ.
Most business owners will eventually confront the issue of whether to purchase or lease their office space. It is important to remember that by not owning your business property, you are forfeiting substantial financial benefits that could improve your bottom line. Now is the time to consider property ownership, and Community Business Finance's 504 Loan Program offers a way for businesses to purchase commercial property with as little as a 10% down payment and a below-market fixed interest rate.