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Mary Linda
Mary Linda Posted on May 09, 2016
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What's The Purpose Of The SBA 504 Loan And Why Does It Exist?

My question is what is the purpose of the SBA 504 loan program and why does it exist?

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Brett Duxbury

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Https://en.wikipedia.org/wiki/SBA_504_Loan

to provide a locality with economic growth through lending

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The SBA 504 loan gives economic development funding that is intended to encourage private sector investment in fixed assets, the consequences of which will increase productivity and creates new jobs. The local tax base is likewise improved through adding property on which taxes are primarily based. The SBA 504 loan program offers long-term, low down payment, fairly priced fixed rate financing to healthy and expanding organizations that have the possibility of creating new jobs.

SBA Loans Small Business Administration Funding

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Get SBA loans without any collateral and easy application process You can also get loans SBA with bad credit obstruction posed by traditional lenders

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What Can An SBA Loan Be Used For?
Hi,
You could use the SBA loan for the following purposes
  • To provide long-term working capital to use to pay operational expenses, accounts payable and/or to purchase inventory
  • Short-term working capital needs, including seasonal financing, contract performance, construction financing and exporting
  • Revolving funds based on the value of existing inventory and receivables, under special conditions
  • To purchase equipment, machinery, furniture, fixtures, supplies or materials
  • To purchase real estate, including land and buildings
  • To construct a new building or renovate an existing building
  • To establish a new business or assist in the acquisition, operation or expansion of an existing business
  • To refinance existing business debt, under certain conditions.
  • Following are the situations you can't use a SBA loan
  • To refinance existing debt where the lender is in a position to sustain a loss and SBA would take over that loss through refinancing
  • To affect a partial change of business ownership or a change that will not benefit the business
  • To permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital to continue the business until the SBA-backed loan is disbursed
  • To repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow
  • For a purpose that is not considered to be a sound business purpose as determined by SBA
  • If you are unsure whether or not your anticipated use of funds is allowed, check with your SBA-approved lender
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Aug 08, 2016 • The Computers & Internet
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What Are The Terms Of The SBA 504 Loan?
SBA 504 loans used for the expansion or acquisition of real estate with a term of 20 years, at the same time as equipment loans generally have a term of 10 years. The SBA 504 loan has a low rate of interest, that's fixed for the term of the loan.
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Jun 03, 2016 • The Computers & Internet
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What Loan Amounts Are Available With The SBA 504 Loan Program?
The maximum SBA 504 loan amount is $5.5 million. There is no maximum overall project fee. The SBA portion cannot exceed 40% of the eligible project costs.
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Jun 02, 2016 • The Computers & Internet
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What Loan Amounts Are Available With The SBA 504 Loan Program?
The maximum SBA 504 loan amount is $5.5 million. There is no maximum overall project fee. The SBA portion cannot exceed 40% of the eligible project costs.
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Jun 02, 2016 • The Computers & Internet
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What Are The Charges Involved With SBA 504 Loans?
Fees involved with SBA 504 loan; SBA fees, approximately 2.5% of SBA portion of the loan and secondly the lender fees, negotiated with the lender, but usually 1-2% on lender loan.
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May 27, 2016 • The Computers & Internet
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Can I Prepay My SBA 504 Loan?
Yes, you can prepay your SBA 504 loan; but SBA 504 loans are funded in a different way as compared to bank loans and consequently have specific repayment terms. Loan assumption may be a possible alternative to loan repayment based on your current situation.
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May 09, 2016 • The Computers & Internet
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What Is The Minimum Down Payment For An SBA 504 Loan?
A minimum down payment of 10% is required for most SBA 504 loan initiatives. A 15% down payment is needed while a business is a start-up (less than 2-years in operation) or when the assignment constructing is a special-purpose use. A 20% down payment is required in conditions concerning both a start-up business and a unique-purpose use.
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Mar 30, 2016 • The Computers & Internet
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Can Pre-Existing Debt On The Project Property Be Refinanced With SBA 504 Loan Proceeds?
Sometimes. Once the project property is land and building, also it was acquired less than nine months prior to the application is received by SBA, the financing used to get the land and building might be considered "interim financing" and become qualified to become compensated-served by 504 loan proceeds.
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Jan 07, 2016 • The Computers & Internet
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Why Should I Think About An SBA 504 Loan?
The Small business Administration 504 Loan program offers benefits to smaller businesses. The advantages include low lower payment (permitting the small company to preserve capital), longer terms, and bigger loans than might be available via a conventional loan.
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Aug 12, 2015 • Computers & Internet
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