Pre-Qualification SBA 504 Loan ApplicationGet it right now!

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How to Qualify

Under the following guidelines, over 98% of incorporated entities in the U.S. are qualified small businesses and are eligible for an SBA 504 loan. Check below to learn more and see if your business is, too.

Eligible Borrowers:

  • For-profit, non-publicly traded businesses.
  • Tangible business net worth (including affiliates) not to exceed $15 million.
  • Average net income of the business not to exceed $5 million over the previous two years.
  • Personal liquidity of each principal/guarantor not to exceed the total project costs of the proposed 504 loan.
  • Ownership must be comprised of 51% U.S. citizens or resident aliens (Legal Permanent Residents).


Ineligible Use of Funds:

  • Working capital.
  • Inventory.
  • Rolling stock.
  • Business “good will” or “blue sky” (common in business acquisition financing).

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Ineligible Borrowers:

  • Non-profits (except sheltered workshops).
  • Passive holders of real estate and/or personal property.
  • Lending institutions (mortgage brokers and correspondent lenders are eligible).
  • Life insurance companies (however, franchised agents are eligible).
  • Businesses located in a foreign country or owned by aliens.
  • Businesses selling products/services through a pyramid plan.
  • Illegal businesses.
  • Gambling concerns.
  • Businesses which restrict patronage.
  • Government owned entities (excluding Native American Tribes).
  • Businesses engaged in promoting religion.
  • Consumer and marketing cooperatives (producer cooperatives are eligible).
  • Businesses engaged in loan packaging.
  • Businesses owned by persons of poor character.
  • Businesses providing prurient sexual material.
  • Businesses that have previously defaulted on a Federal loan.
  • Businesses engaged in political or lobbying activities.
  • Speculative businesses.

If your business didn’t make this exhaustive list, then it’s probably okay.


Cost Structure SBA Myths