SBA 504 Loan Structure (Examples)
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The following are examples of SBA 504 loan project costs and loan structures.
SBA 504 Project Costs (Example A): |
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| 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): |
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| 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: |
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| 1st Mtg. (50%) | $500,000 |
| 2nd Mtg. (40%) | $400,000 |
| Equity | $100,000 |
| Total Project Cost | $1,000,000 |
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50% of the Total Project Cost |
40% of the Total Project Cost |
10% Total Project Cost |
| 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!
