SBA 504
Loan
About 504
The SBA 504 Loan program is designed to help start-ups and expanding small businesses thrive and create jobs. The program provides long-term, competitively priced fixed-rate loans for major fixed assets to businesses which have a high probability of success in the marketplace.
Working in conjunction with qualified lenders, a typical SBA 504 loan structure is:
- 50% qualified lender in 1st lien position
- 40% SBA 504 in 2nd lien position
- 10% equity injection
- New business or special purpose building requires 15% equity injection
- New business and special purpose building requires 20% equity injection
December Effective Rates
10-Year
6.519%
20-Year
6.204%
25-Year
6.096%
Benefits of the SBA 504 Loan Program
Benefitting both Borrowers and Lenders
- Long-term, fixed rate financing
- 20 or 25 year terms on real estate; 10 year term on equipment
- Low equity injection, preserving working capital
- Short-term assets remain lien-free to support other financing needs
- Flexible ownership options allow borrowers to choose the ownership structure that works best for them
- Excellent loan-to-value; typically 50% or less
- Alleviates legal lending limit concerns
- Pricing flexibility on first mortgage portion
- First mortgage portion may be sold on the secondary market
Who Is Eligible?
Check out the region’s commercial properties on our layered mapping tool that offers intuitive search functions including property sizes and proximity to assets like airports and incentive zones.
For-profit corporations, limited liability companies, partnerships or proprietorships with net worth not exceeding $20 million and average net income not exceeding $6.5 million in the past two years.
Occupancy: For new construction, the company must occupy at least 60% of the building immediately and 80% of the space by year 10. Only 20% of the total space may be rented out permanently. For the purchase of an existing building, the company must permanently occupy 51% of the building.
How To Apply
Complete the SBA 504 Application and email to sara@lakeagassiz.com and ryan@lakeagassiz.com. We’ve compiled a checklist of information you’ll need to start the application process. Lake Agassiz Development Group will work directly with you and your banker through every step of the process. A majority of the following information will be provided by your banker.
Pre-Application SBA 504 Loan Program Checklist
SBA 504 Application
Borrower Release & Consent
FAQs
Lake Agassiz Development Group has been originating SBA 504 loans for small businesses across North Dakota since 2004. The SBA 504 program is designed to help start-up and expanding small businesses create jobs and thrive within their communities. The program provides long-term, competitively priced fixed-rate loans for major fixed assets to businesses that have a high probability of success in the marketplace.
Yes. SBA 504 loans are funded differently than conventional bank loans and feature unique payoff terms
and requirements:
- Full prepayments are accepted only on the 3rd of each month.
- Lake Agassiz must receive written notice 15 days in advance of the payoff date.
- Prepayment premiums may apply.
If you wish to pay off your outstanding balance or discuss the SBA 504 loan prepayment process, contact
us by email at deb@lakeagassiz.com or by phone at 701.365.0409.