SBA 504 Loans: Benefits for Your Business
The Small Business Administration (SBA) often guarantees loans for smaller companies, particularly those in economically underdeveloped areas. It partners with nonprofits called Certified Development Companies (CDCs) to bolster the local economy and contribute to the success of businesses serving the community. If you own a business in an underdeveloped area and you meet certain criteria, you may be eligible for SBA loans. These loans can help secure property or purchase equipment.
SBA 504 Loans
SBA 504 loans are specifically designed to help small business owners obtain, renovate or expand their property. The loans also help buy necessary equipment to conduct their business. If you are a woman or minority, or you own a rural business, you likely qualify for a 504 loan. However, you must work with a CDC in your development area. This fixed-rate loan could be instrumental in getting your business off the ground or expanding your business. If you run a for-profit business in the United States, have invested your own money in this business and have exhausted other financing options, you are likely a good candidate.
What Can the Money Be Used For?
If you receive an SBA 504 loan, you can use the money to buy land and construct a building for your business on it. You can also buy an existing building. If your current building simply needs updates or renovations, you can use the loan to pay for those changes. While you cannot purchase inventory with this loan, you can use it to buy equipment that you need to run your business. It is also possible that you can use the loan to refinance existing debt that was used to purchase property or long-term equipment.
How to Qualify
If you believe you may qualify and would benefit from SBA loans, start by contacting your local SBA office. The people there can give you more information. They can also refer you to business counselors who can offer valuable advice on business financing. It is also a good idea to contact a local CDC to work with you. Finally, fill out all the appropriate paperwork and submit your loan application.
The SBA works to help small businesses succeed. It is interested in developing local economies and ensuring that they remain strong and vital. By guaranteeing SBA loans to purchase fixed asset such as land, buildings or machinery, the SBA contributes to the future success of these areas. As a business owner, you should consider taking advantage of the benefits that these loans can offer you. Give us a call today to discuss SBA loans for your small business.