25 Year Term Now Available For Sba 504 Loans

by Rino Abdulah Mei 05, 2023 Posting Komentar

The SBA 504 Loan is Going Long! BizCap from bizcap.org

Introduction

Small businesses are the backbone of our economy, and the Small Business Administration (SBA) has been instrumental in helping entrepreneurs realize their dreams. The SBA offers a variety of loans, including the 504 loan program, which provides long-term financing for the purchase of real estate and equipment. In 2023, the SBA has announced that it will offer a 25-year term for 504 loans. This is great news for small business owners who need more time to pay off their loans.

What is the SBA 504 Loan Program?

The SBA 504 loan program is a partnership between the SBA, certified development companies (CDCs), and participating lenders. The program provides long-term, fixed-rate financing for major fixed assets, such as real estate and equipment. The loans are typically used to finance the purchase, renovation, or construction of commercial real estate, as well as the purchase of equipment.

What are the Benefits of a 25-Year Term?

The new 25-year term for SBA 504 loans provides several benefits for small business owners. Firstly, it gives them more time to pay off their loans, which can help with their cash flow. Secondly, it can lower their monthly payments, making it easier for them to keep up with their payments. Lastly, it can help them qualify for larger loans, as lenders are more willing to lend to businesses with longer loan terms.

What are the Requirements for a 25-Year Term?

To qualify for a 25-year term for an SBA 504 loan, the business must meet certain requirements. Firstly, the loan must be used to finance a project that has a useful life of at least 25 years. Secondly, the borrower must have a credit score of at least 680 and be able to demonstrate the ability to repay the loan. Lastly, the borrower must provide collateral for the loan, such as real estate or equipment.

How to Apply for an SBA 504 Loan with a 25-Year Term

To apply for an SBA 504 loan with a 25-year term, small business owners must work with a CDC and a participating lender. The CDC will process the loan application and work with the borrower to prepare the loan package. The lender will provide the financing for the loan and work with the CDC to close the loan.

Conclusion

The new 25-year term for SBA 504 loans is great news for small business owners who need more time to pay off their loans. The longer loan term can help with their cash flow and lower their monthly payments, making it easier for them to keep up with their payments. To apply for an SBA 504 loan with a 25-year term, small business owners must work with a CDC and a participating lender.