504 Loans

The SBA 504 loan program offers many benefits to your business:

• Low down payment—typically only 10%
• Low, fixed interest rate
• 20-year term—no balloon payments
• Soft costs and loan fees can be financed

Working capital stays in your business so it can continue to grow!

SBA 504 loans can be used to finance the following:

• Land acquisitions and construction of a new facility
• Purchase and renovation of an existing building
• Purchase of equipment
• Permits, impact fees, architectural fees, all soft costs and financing fees

Your business may qualify for an SBA 504 loan if it:

• Is a for-profit company with a net worth of less than $7.5 million and the average net profit after tax was less than $2.5 million the past two years.
• Will be the primary occupant of the property being purchased. Your business must plan to occupy at least 51% of the space in an existing building to be purchased or 60% of a building to be constructed.

Capital Matrix works in participation with the lender of your choice to provide the financing you need.

Example

A growing business plans to buy land and construct a new building. It is estimated that the total costs will be $1,000,000. Through the SBA 504 program, the expansion could be financed as follows:

	Amount	% of Project	Terms	Rate	Collateral
Bank	$500,000	50%	10 yrs	Market	1st DOT
Capital Matrix	$400,000	40%	20 yrs	Fixed	2nd DOT
Borrower	100,000	10%
Total	$1,000,000	100%

• Term and loan fees on the bank financing would be negotiated with the bank; amortization is typically 20 years.
• The interest rate on Capital Matrix’ financing is determined by the sale of SBA-guaranteed debentures; rates are fixed for the 20-year term of the loan. Loan fees are 2.15% of the amount financed by the debentures, in the example above that would be 2.15% of $400,000. These fees are financed.

To apply for an SBA 504 loan, click on “Application” or contact Capital Matrix or your banker for more information.