Frequently Asked Questions

What is an SBA Loan?

The U.S. Small Business Administration established the 504 loan program to help businesses purchase or expand commerical real estate and acquire equipment while preserving working capital.  For more detailed information, visit www.sba.gov.

Why should we use the 504 program?

Compared to conventional financing, 504 loans are amortized over 20-year terms at fixed rates, which allows for attractive, predictable monthly payments.  Additionally, businesses are offered an affordable down payment, which allows the entrepreneur to conserve working capital and retain liquidity for operating costs.  For lenders, it reduces the risk through its structure as second mortgage financing.

What types of assets are eligible for financing?

The types of assets that are eligible for 504 loans are land and building purchases; building construction, expansion, and remodeling; machinery and equipment purchases; and professional fees and soft costs (i.e. appraisals, attorney fees, etc...).

What is a CDC?

A Certified Development Company (like Wisconsin Business Development) finances business expansion through the SBA 504 loan program. Certified by the SBA, they operate under the jurisdiction of a board which includes local government officials, private sector lending institutions, and business and community organizations. The CDC's professional staff works with businesses to tailor a financing package that meets program guidelines.  Currently, there are more than 250 CDC's throughout the United States.  For more information on CDC's, visit www.nadco.org.