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Loan Amounts, Interest Rates & Fees
Maximum loan amounts are determined by how funds will be used based on which goal they support from the list below:
- Job Creation - The maximum SBA debenture is $5 million for meeting the job creation criteria or a community development goal. Generally, your business must create or retain one job for every $65,000 provided by the SBA, except for small manufacturers, which have a $100,000 job creation or retention goal (see below).
- Public Policy - The maximum SBA debenture is $5 million or $5.5 for small manufacturing or when meeting the public policy goals of energy reduction or alternative fuelsl. Examples of public policy goals include:
- Business district revitalization
- Expansion of exports
- Expansion of minority business development
- Rural development
- Increasing productivity and competitiveness
- Restructuring because of federally mandated standards or policies
- Changes necessitated by federal budget cutbacks
- Expansion of small business concerns owned and controlled by veterans (especially service-disabled veterans)
- Expansion of small business concerns owned and controlled by women
- Small Manufacturing - The maximum debenture for small manufacturers is $5.5 million. A small manufacturer is defined as a business with its primary business classified in sector 31, 32, or 33 of the North American Industrial Classification System (NAICS), and all of its production facilities located in the United States. To qualify for a $5.5 million 504 loan, your business must meet the definition of a small manufacturer and accomplish one of the following:
- Create or retain 1 job opportunity per $100,000 guaranteed by the SBA [Section 501(d)(1) of the Small Business Investment Act (SBI Act)]
- Achieve one of the community development or public policy goals [sections 501(d)(2) or (3) of the SBI Act]
Generally, the project assets being financed are used as collateral. Personal guarantees of the principal owners are also required.
Maturity terms of 10 and 20 years are available.
Interest rates on 504 loans are pegged to an increment above the current market rate for 5-year and 10-year U.S. Treasury issues.
Fees total approximately 3 percent of the debenture and may be financed with the loan.