SBA 504 loans offer a strategic financing solution for businesses, typically comprising a tripartite structure where 50% of the finance comes from the participating commercial lender, 40% from NEDCO as the Certified Development Company (CDC), and the remaining 10% from the business borrower itself. For instance, let’s consider a $2,200,000 real estate project for an existing business. Here is how the loan structure might look like:
| Participant | Loan Amount | Percentage of Project | Loan Term | Interest Rate | Collateral |
|---|---|---|---|---|---|
| Commercial Lender | $1,100,000 | 50% | Min. 10 Years | Market Rate | 1st Mortgage |
| NEDCO | $880,000 | 40% | 20 Years | Fixed Rate | 2nd Mortgage |
| Business Borrower | $220,000 | 10%* | Equity | — | — |
The SBA 504 loan offered by NEDCO is more than just a financing tool; it’s a catalyst for business growth. Here are some ways this loan program can empower businesses:
NEDCO is dedicated to helping lenders navigate the complexities of the SBA 504 Loan Program. We invite you to contact us to schedule a complimentary Lender Training seminar for your Commercial Lending Department. In this seminar, we will discuss the SBA 504 Loan Program in detail, share insights on recent program changes, and illustrate the considerable advantages it can offer to lenders and their small business customers.
In partnering with NEDCO, lenders not only receive a high level of support and guidance but also join us in our mission to fuel the growth of small businesses. We provide a unique combination of lending expertise, understanding of the small business landscape, and commitment to supporting lenders in serving their clients better.
