SBA 504 Loan

Typical SBA 504 Loan Project Structure

$1,000,000 Project Example

H-GALDC works directly with the financial institution and business applicant to develop financing packages that meet SBA 504 Loan Program guidelines and credit criteria.

The staff then processes, closes, and services the loan. SBA 504 Loan Program loans offer lower, fixed interest rates and longer, 25-year repayment terms.

The borrower contributes less equity, which preserves liquidity, and longer terms help improve cash flow. Borrowers can roll most of the soft costs of obtaining the loan into the project financing. Partner lending institutions fund 50% of the project amount and hold the first lien on the loan.

• Is the business for-profit and located in Texas?
• Will the business occupy at least 51% of the project property for existing buildings or 60% of the project property for new construction? Or, will the equipment be used for business operations?
• Does the business, including affiliates, have a tangible net worth of less than $20 million and have an average net income of less than $6.5 million after federal income taxes for the two years preceding your application?

If the answer is “yes” to all of these questions, the project will likely qualify for the 504 Loan Program.

Eligible Use of Funds

• Land
• Purchase of Existing Buildings
• New Construction
• Fixed Assets from Business Acquisition
• Building Expansion/Renovation
• Long-Term Equipment
• Professional Fees
• Lender’s Interim Points & Interest