For Borrowers

What's right for your business?

Owning rather than leasing your commercial property can really pay off. For many small businesses, a monthly mortgage payment can be the same or less than a lease payment. And your SBA 504 fixed rate loan payment won't increase annually - like your lease rate will. Owning, of course, also helps boost your equity, and the SBA 504 needs just a minimal down payment. If you’re a healthy business whose expansion plans call for the investment and use of real estate or equipment, you may qualify for 90% financing through the SBA 504 Loan Program. If you are a start-up business, you can still qualify for an SBA 504 Loan for 85% financing.

Capital CDC will help you from start to finish. Our professional team will work directly with you to tailor a financing package that meets program guidelines and the credit criteria of your business.

Capital CDC is organized to assist in financing growth through investments that help businesses become more competitive in the marketplace. Our task is to package, process, close and service the 504 loan.

Advantages of 504 over Conventional Financing

• Low down payment- as little as 10%

Allows you to preserve your cash for your working capital. Most banks will lend only 70-80% of the appraised value of the project leaving you to sink in 20-30% plus the cost of renovations plus the soft costs.

• Fixed Rate on the SBA 504 portion

You don't have to worry about the prime lending rate going up. You can plan because you know the amount of your mortgage payments for the next 20 years.

• Long Term

CDC 504 loans are for 10 or 20 years. Because the CDC is in second lien position, the bank or other lender doing the 50% first lien loan are willing to lend at a longer term. Longer terms make your monthly payments lower.

• Low Interest Rate

Even with the fees and closing costs included in the rate, it is still a low rate for a subordinate mortgage loan, particularly for small business. The blended rate as between the bank portion and the Certified Lender's 504 portion makes the project affordable for you.

• For the Bank wishing to participate with you as the 50% lender:

The bank gets Community Reinvestment Act credits; they lend at a lower loan to value ratio; they keep you, a growing customer, happy; they have lower risk because the SBA 504 loan is in second position behind the lender.

• The Community

Gets the advantage of keeping or attracting a healthy, growing small business that will continue to create jobs as well as provide future community development.

Capital CDC Staff is available to help borrowers with their questions… feel free to Contact Us at any time or learn more from our Frequently Asked Questions.

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