Borrower FAQ

What is the 504 Loan Program?

The 504 Loan Program is a U.S. Small Business Administration (SBA) funded program that provides financing to small and mid-sized businesses for the purchase of equipment and commercial real estate.

What can 504 loans be used for?

Business owners can use 504 loans for land and building purchases, new construction or renovation, leasehold improvements and purchases of heavy machinery, equipment and commercial vessels. They can also be used for soft costs such as title searches, attorney’s fees, appraisals, etc. Visit the SBA 504 Loan Program page for more information.

What advantages does the loan offer?

With low down payments and fixed, low, long-term interest rates, the 504 loan helps businesses retain working capital. It removes the uncertainty associated with refinancing and balloon payments, enabling long-term planning and business expansion. For lenders, the loan offers lower risk through shared financing, a low loan-to-value ratio and the ability to earn CRA credits.

What types of businesses are eligible?

Businesses must be for-profit enterprises with a tangible net worth not to exceed $15 million and net profit after taxes of no more than $5 million during the previous two years. The loans are available to individual business owners or multiple owners partnering on a project. The 504 loan program serves a wide range of businesses, from auto repair shops to Internet companies, manufacturers, child care centers, law offices, hotels and motels, veterinary clinics and warehouses. Visit the Eligibility page for more information.

What’s the maximum amount of a 504 loan?

Typical 504 loan size varies from $100,000 to $5.5 million depending on eligibility and the job creation, community development and economic development goals met by the project.

How does financing work?

Evergreen partners with lenders to provide up to 90 percent financing on a project. The partner lender typically provides 50 percent and Evergreen provides 40 percent. The borrower puts as little as 10 percent down, depending on the type of project. Visit the 504 Loan Structure page for more information.