Thursday, April 24, 2014
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504 Loan Programs

The 504 Loan Program provides small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.



ELIGIBLE BUSINESSES AND PROPERTY TYPES
Almost any type of for-profit business is eligible. Commercial real-estate must be partially occupied by borrower and includes, but is not limited to, the following types of properties:


USE OF PROCEEDS

Real-estate acquisition, construction, or refinance - up to 90% financing available
Equipment Acquisition - up to 80% financing available


LOAN STRUCTURES

Financing available on projects up to $6,000,000.

  • Evolve Bank & Trust typically provides a first mortgage of up to 50% of the total loan-to-value. This loan can range from $250,000 to $3,000,000.
  • The SBA, through a Certified Development Company (CDC) provides up to 40% loan-to-value in a second lien position. This loan can range from $250,000 to $2,000,000.

TERMS AND INTEREST RATES
First Mortgage - up to 25-year term for real-estate loan and up to 15-year term for equipment purchase with fixed and variable interest rates available.
Second Mortgage - up to 20-year term for real-estate and up to 15-year term for equipment purchase. Fixed rate is determined at SBA guaranteed 504 debenture sale.



FEES

First Mortgage - fees are always market competitive.
Second Mortgage - 2.75% + legal review fee. This fee is financed in the loan.
Fees also include customary closing costs, construction loan fees (if applicable), and bridge fees.


ELIGIBLE PROPERTIES

Most for-profit business is eligible for financing. Commercial real-estate must be 51% or greater owner occupied.