SBA 504 Loan Benefits

Our loan program helps small business acquire, build and expand owner occupied real estate and other fixed assets. By working with local banks and other first mortgage lenders, and using the SBA 504 Loan Program, HIDC provides long-term financing at excellent rates.

The 504 Loan Program provides approved small businesses with long-term, fixed rate financing used to acquire fixed assets for expansion or modernization. 504 loans are made available through Certified Development companies (CDCs), the SBA’s community based partners for providing 504 Loans.

Eligible Business Size

For Profit Businesses net worth not to exceed $15 million.

Average net income of $5 million or less after federal income taxes for the preceding two years prior to application.

Typical Loan Structure

50% bank loan
40% HIDC/SBA loan
10% borrower down payment

Proceeds Use

Purchase existing building
Land acquisition and improvements (may include soft costs)
The construction of new facilities or modernizing, renovating or converting existing facilities.

Program Requirements

51% owner occupancy for existing building.
60% owner occupancy for new construction.


Generally project assets being financed are used as collateral.


Personal/guarantees of the principal owners of 20% or more ownership is required.


All SBA 504 Loan fees may be financed in the 504 loan.
Interest rates on SBA 504 loans are correlated with the current market rate U.S. Treasury issue, and are fixed for 25 years.

Borrower Benefits

  • Low down payment for capital asset financing – as low as 10%
  • Long-term fixed rate financing – 25 years
  • No “balloon” payments
  • Reimbursable closing costs up to $2,500
  • Turnkey projects financing
  • Collateral requirements are generally project specific

Lender Benefits

  • Lower credit risk profile, easier approvals
  • Ability to offer more aggressive pricing and loan structures
  • Core asset holding or secondary market opportunities
  • Leverage ROE and ROA Performance measures
  • HIDC handles SBA interface, approval and reporting

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