Why choose SBA 504 financing?
When you compare, the SBA 504 program has distinct advantages over the 7(a) program or conventional financing.
- As low as 10% down, preserves your working capital
- Below-market, FIXED interest rates
- Lowest up-front costs
- Closing and other soft costs can be rolled into loan
- No maximum loan amount
- Multiple loan limits removed when energy efficiencies are implemented
- No additional collateral required
SBA 504 Loan Comparison
vs. 7(a) & Conventional
Compare financing options in the chart below, then contact our SBA loan experts to learn more.
|SBA 504||SBA 7(a)||Conventional|
|Down Payment||10% minimum||10-15% minimum||25-40%|
|Interest Rates||SBA second mortgage at below-market rates, fixed for 20 years||Typically variable; tied to prime||Varies by lender|
|Fees||Included in SBA loan; approximately 2.15%||Paid out-of-pocket; typically about 2.75%||Paid out-of-pocket; approximately 1%|
|Project Size||No maximum||Maximum loan amount $5 million||No maximum|
|Collateral||No additional collateral required||Additional collateral typically required for 90% financing||Typically no additional collateral required|
|Prepayment Penalty||Yes, for first 10 years, declining each year||Yes, typically in first three years||Varies by lender|