Lake County Partners CDC 504 Loan Progam
This loan program is to provide assistance to existing businesses to acquire or renovate real estate or purchase new equipment. Banks normally require a down payment of 20-30% when financing fixed assets and prefer a floating rate or a fixed rate with a very short amortization. The down payment may be as low as 10% on a SBA 504 loan and the rate may be fixed for 10-20 years.
| Program Details |
| Purpose: |
To purchase land and construct a new building; buy an existing building and renovate or acquire new equipment. |
| Eligibility: |
Creditworthy startups will be considered but the program is aimed at existing for-profit businesses with annual Net Profit less than $2,500,000 and a Net Worth less than $7,500,000. |
| Ineligible Projects (not all inclusive): |
Working capital, rental real estate, debt refinance and inventory financing. |
| Loan Amount: |
Up to 40% of the project to $1,500,000 maximum for SBA portion on regular loans; Up to 40% of the project to $2,000,000 maximum for SBA portion on public policy loans; Up to 40% of the project to $4,000,000 maximum for small manufacturer loans. |
| Term: |
10 years if equipment only, 20 years for real estate. |
| Rate: |
Fixed for term of the loan based on U.S. Treasuries on funding date. |
| Application Process: |
Can apply through local bank or directly with LCP. |
| Fees: |
2-4% financed which keeps all-in rate low. |
| Job Criteria: |
1 job created for every $50,000 provided by SBA for regular loans; 1 job created for every $100,000 provided by SBA for small manufacturer loans; 1job created for every $75,000 provided by SBA for public policy loans. |
| Other Requirements: |
Personal guarantee of every 20% owner; 50% bank finance; 10% owner's equity.*
| Typical Structure: |
| Borrower’s Down Payment |
10% |
| Bank 1st Mortgage |
50% |
| SBA 2nd Mortgage-504 loan |
40% |
|
100% |
*Add 5% to borrower’s down payment for startup business plus 5% for specialized building.
Notice: Important information about identification procedures when obtaining a SBA 504 loan.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all Certified Development Companies to obtain, verify, and record information that identifies each person who applies for a 504 loan.
What this means for you: When you apply for a 504 loan, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
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Note: This program overview is intended as a reference only. Some details may have changed since publication and/or not be reflected in the description. For specific application information for this program, please contact Frank Brisbois, Vice President of Commercial Lending, Lake County Partners at (847) 247-0137.
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