For Lenders

How to Use the 504 Loan for Your Customers

The SBA 504 loan program involves a partnership between a private lender, Self-Help, and Small Business Administration to help finance long-term assets for small businesses.  A private lender, usually a bank will provide interim financing for up to 90% of the total project costs, and a permanent mortgage for 50% of total project costs. Self-Help provides up to 40% of permanent financing for total project costs.  The small business provides the remaining amount as their equity contribution.

For our latest rates, please visit our Current Rates section.

Advantages to the Participating Lender:

• Attractive terms to customers with no additional costs: long repayment term, low downpayment

• Great LTV means low collateral risk
  
• Private lender has no specific restrictions on fees and rates; and the loan does NOT directly involve the SBA
• Much less paperwork and less “red tape” for your bank than a 7a loan
• Self-Help handles all SBA paperwork from approval to servicing the 504 loan
• As a private lender, you capture all deposit relationships, which means your relationship will grow as borrowers grow in their businesses
• Most SBA 504 Loans meet Community Reinvestment Act (CRA) compliance requirements
• SBA 504 first mortgage secondary market available

Maximum sizes of the 504 loan:

• $2.0 million for loans that meet SBA public policy goals (for example: the borrower is a woman-, minority-, or veteran-owned business; or located in a rural area)
• $4.0 million for loans to small manufacturing businesses
• $1.5 million for standard 504 loans