SBA 504 LOAN PROGRAM

 

Catawba Regional Development Corporation

 

The SBA 504 Business Loan Program provides partial financing for land, buildings, and major equipment.

 

SBA 504 funds range from $50,000 to $2,000,000 are available to businesses located in Chester, Lancaster, Union, and York counties, and throughout South Carolina.  These funds can be used in conjunction with bank financing to fund up to 40% of eligible project costs.  A below market interest rate and 10 or 20 year term can significantly lower overall debt service providing improved cash flow for the business.  The interest rate is fixed for the term of the loan.

 

The application process includes submitting a projections, business financials, personal financial statements, and an outline of project costs.  Business Plans are required for start-up companies.  Cash flow, credit history and collateral will be considered in the loan review process.

 

SBA 504 funds combined with bank financing can be a powerful economic development tool.  These funds are available to new and expanding businesses for the purpose of increasing the local tax base and creating jobs.

 

Industrial, commercial, service, and retail companies are eligible for SBA 504 funds.  Job creation is a key component to the program, requiring creation of one permanent job for every $50,000 of SBA funds loaned.

 

SBA 504 Loan Funds

 General Guidelines

  • Loan Amounts - $50,000 - $2,000,000 (Manufacturing firms up to $4,000,000)
  • Interest Rate - Fixed
  • Term - 10 or 20 years
  • Maximum Loan Amount - 40% of Project
  • Origination Fee - 1.5% (financed in project costs)
  • Legal Fees - Varies
  • Prepayment Penalty - Applies only during first half of loan term
  • Job Creation - One permanant job within 2 years for every $50,000 of SBA 504 funds loaned; may be less if the project meets federal public policy goals.
  • Uses for Loan Funds - Land, Building Construction, Building Expansion, Machinery, and Equipment