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SMALL BUSINESS OWNERS 504 LOAN PROGRAM

Get Financing for Commercial Real Estate & Equipment, But Keep Cash Flow High & Down Payments Low

The SBA 504 loan offered at NEDCO gives your business access to much-needed capital, while at the same time keeping interest, down payments, and your monthly payments low. If you pursue similar financing at commercial banks, it’s typically either inaccessible or requires a much larger down payment.

Structure of the Loan and Down Payment Schedule

Our 504 loan program is a partnership between NEDCO, an SBA Certified Development Company, and a commercial lender. This type of working arrangement allows us to provide 90% financing at below-market interest rates. In addition, you also get a long amortization term, which helps keep your monthly payments low.

In the most common scenario, a commercial lender provides 50% of the financing for your project and takes a first lien position. NEDCO takes on 40% and a second lien position. You finance the remaining amount of the loan – 10%.

If you have been in business less than 2 years, we require a 15% down payment. If your project is both a startup and a special facility, your down payment increases to 20%.
If you only need machinery and equipment, you may be able to keep each down payment to 10% and 15%, respectively.

Are you Eligible for 504 Financing?

If you meet the following criteria, you must likely are:

  • Your business must fall within the standards set forth by the SBA
  • Your owner must be either a legal US citizen or a registered alien with a green card
  • You must operate the business for profit and be located in Pennsylvania
  • You must be a defined legal entity, such as a sole proprietor, LLC, corporation, or partnership
  • Your business must not have a net worth in excess of $15 million
  • Your company’s average net income after Federal income taxes for the 2 full fiscal years before application may not exceed $5 million
  • We cannot make loans if you are engaging in speculation or are investing in rental real estate

To determine if you are eligible for financing, please contact our 504 loan specialists.