Small businesses looking for long-term financing should really be in-the-know about the 504 loan Program. The U.S. Small Business Administration (SBA), with the help of Certified Development Companies (CDCs) like Growth Capital Corp., provides long-term financing of up to $5 million for major fixed assets. Promoting job creation and business growth in the small business sector is a key way to enhance overall economic development. Keep reading to see if your business might be eligible and to learn how to use our 504 Loan Calculator.
Eligibility & 504 Loan Uses
Before diving into how much funding your business might be able to secure, you have to consider eligibility requirements and approved uses of the grant funds. Businesses across all industries are eligible to apply for the 504 Loan Program, but there are three primary requirements—
- Your business must operate as a for-profit entity in the U.S.,
- Your business’s tangible net worth must be less than $15 million, and
- Your business must have an average net income of less than $5 million (after federal taxes) for two years prior to your application.
Our website and the SBA list other eligibility requirements to also be mindful of, such as size guidelines and feasible business plans, among other things. Consult these requirements as you are considering applying for a 504 Loan!
Once you know if your business is eligible to participate in the loan program, you will need to determine if your intended use of the funding is permitted by the SBA. There are a range of assets covered by 504 funding—purchasing land, constructing new facilities, improving existing infrastructure, and more. All of these actions are designed to create jobs and to help businesses grow, which is the aim of the SBA! Not sure if your loan use goals would be covered? Check out our list of approved project costs.
Growth Capital Corp.’s 504 Loan Calculator
- Determine Potential Expenses
In order to determine how much funding to apply for, you need to have a strong business plan that outlines the specific items and projects you would like to undertake. Consider whether or not you will be looking to purchase land or equipment, to improve existing structures, to build new structures, or all of the above. Once you have that mapped out, you will need to estimate how much you intend to spend on each of those items. A strong estimate will require you to research current real estate and construction costs related to your industry, in your geographic location.
- Use Our 504 Loan Calculator
Our 504 Loan Calculator is a quick and easy tool that can help you start to conceptualize monthly payments, fees, and interest costs for projects related to your loan. Using the estimates you’ve already made for your intended land purchases, construction projects, and infrastructure improvements, you can generate an easy-to-read projection of fees and payments. Input your estimates, select your industry type, and let the calculator do all the work!
Our loan calculator is intended to be used as a tool to start your 504 loan planning. It makes many assumptions and should only be used for reference. Eligibility and accurate calculations can only be made based on a personal interview.
Work with Growth Capital to Apply for 504 Funding
SBA 504 Loans are available exclusively through CDCs, like Growth Capital Corp. We work with business owners and bank loan officers to facilitate participation in this business development process and have been the top SBA 504 lender in Ohio for the last 11 years. Check out our 504 Loan Application Checklist and contact our friendly and knowledgeable professionals today to get started!