sba 504 loan program sba 504 lender

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SBA 504 Loan Structure (Examples)


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Click on the play button to watch a video example of an SBA 504 loan structure from Chris!

The following are examples of SBA 504 loan project costs and loan structures.

SBA 504 Project Costs (Example A):

Acquisition of Real Estate $800,000
Renovations $100,000
Machinery $50,000
Soft and Closing Costs $50,000
Total Project Cost $1,000,000
   

SBA 504 Project Costs (Example B):

Land $ 250,000
Construction $ 600,000
Soft Costs $ 125,000
Closing Costs $   25,000
Total Project Cost $1,000,000

SBA 504 Loan Structure Example:

1st Mtg. (50%) $500,000
2nd Mtg. (40%) $400,000
Equity $100,000
Total Project Cost $1,000,000

 

50% of the Total Project Cost
Conventional Loan at Market Rates

40% of the Total Project Cost
Below Market, Fixed Rate Bond with an SBA Guarantee

10% Total Project Cost
Equity Injection/Down Payment

Up to 25-year amortization. 20 year amortization. Cash.
No balloons, calls or covenants. No balloons, calls or covenants. Can use equity in land if already purchased.
Option of fixed or variable interest rate. Fixed interest rate at below market rate, fixed for the entire 20 Years. Can use prepaid soft costs, like architectural or engineering fees.
Assumable loan. Assumable loan. *15% equity requirement on special use properties or start-up businesses; 20% for special use properties and start-up businesses.

The Bottom Line: The 504 Loan Program from Mercantile Commercial Capital preserves capital and maximizes cash flow for small business owners. So stop renting
and start owning now!