Thinking of purchasing property or big-ticket equipment for your business but worried about high upfront costs? SBA 504 loans offer a powerful solution designed specifically for major fixed asset acquisition.
These loans work through a three-party partnership:
Unlike many traditional loans, the SBA 504 program provides long-term, fixed interest rates on the CDC portion (up to 25 years!) and extended repayment terms overall. This makes long-term financial planning predictable and manageable. They're ideal for:
Important Note: SBA 504 funds cannot be used for working capital, inventory, or speculative purposes.
Eligibility hinges on meeting SBA criteria and project goals:
Nonprofits generally don't qualify, but specific structures might allow it. Talk to Khojie to explore your specific situation.
Here's a typical breakdown of the funding sources:
| Party | Contribution | Responsibility |
|---|---|---|
| Borrower | 10% (min.) | Down payment |
| Traditional Lender | 50% | Primary loan (1st Lien) |
| CDC/SBA | 40% | Secondary loan (2nd Lien) |
Key points to note:
🚫 Myth: "It takes forever to close."
📌 Reality: While complex, a well-prepared application typically closes within 60–90 days. Khojie helps prevent delays by ensuring your package is complete and accurate upfront, often faster than going it alone.
🚫 Myth: "Only big, established companies qualify."
📌 Reality: SBA 504 loans are specifically designed for small businesses looking to acquire major assets and grow responsibly.
🚫 Myth: "The application process is a bureaucratic nightmare."
📌 Reality: It involves multiple parties, but with expert guidance from Khojie coordinating between you, the bank, and the CDC, the process becomes manageable and straightforward.
Joe's Bakery needed a bigger space to meet demand. With an SBA 504 loan facilitated by Khojie, Joe put down just 10%, secured a new location with predictable long-term financing, and tripled sales within five years.
Sarah's Manufacturing Co. upgraded to state-of-the-art machinery using a 504 loan. Thanks to the low down payment and fixed payments on the CDC portion, she had more capital to reinvest in marketing and R&D, significantly boosting growth.
These aren't just examples—SBA 504 loans drive tangible business expansion.
No, these loans are strictly for purchasing eligible fixed assets, not generally for refinancing existing debt.
Not necessarily. While good credit helps, lenders evaluate your entire financial picture, including cash flow and collateral. Khojie can help position your application effectively.
Typically 60–90 days once all documentation is submitted. Working with Khojie helps streamline this by ensuring your package is complete and submitted correctly the first time.
Yes, personal guarantees from owners with 20% or more ownership are generally required, especially for the bank's portion of the loan.
SBA 504 loans offer incredible leverage for acquiring property or equipment, but navigating the three-party process requires expertise. Don't go it alone.
Khojie specializes in simplifying complex financing. We'll guide you through every step, coordinate with banks and CDCs, and ensure your application is positioned for a smooth, successful, and timely closing.
Take the next step towards securing your business's future:
Ready to acquire that building or invest in major equipment? Secure long-term, fixed-rate financing with a low down payment through the SBA 504 program. Let Khojie guide you.
