MORE BUSINESSES NOW QUALIFY FOR SBA CAPITAL

Growth Corp reports significant improvements to the SBA 504 Loan Program, allowing even more small and mid-size businesses to gain access to quality, long-term capital.

SPRINGFIELD, Ill., Jan. 9, 2025 /PRNewswire/ -- With the turn of a new year, many business owner's thoughts turn to seizing new opportunities to grow or strengthen their business. That's why it's important to be aware of the U.S. Small Business Administration's (SBA) 504 Loan Program…a program specifically designed to offer businesses an affordable and accessible way to grow…and the steps SBA has taken to significantly improve it. Three recent enhancements to this quality source of capital are having a profound impact on the growth and stability of small to mid-size businesses.

Improvements to SBA 504 Debt Refinancing
One of the most significant improvements SBA made is to 504 refinancing…a lending program already in high demand nationwide. Refinancing commercial mortgage(s) with an SBA 504 loan can help businesses free up trapped capital and lock in lower monthly payments. Recent changes now allow businesses to borrow more against the value of the property – up to 90% of the property's fair market value. Owners can also access cash out for eligible business expenses, and even refinance existing government loans, such as SBA 7(a) and 504 loans. In today's environment of higher interest rates and liquidity issues, these changes are making it easier to capitalize on the benefits SBA 504 Refinancing provides.

Increases for Green Energy Loans
SBA has placed a strong focus on providing capital access for businesses looking to increase energy efficiency or generate renewable energy. In addition to the typical benefits of 504 Loans, which include low, fixed rates, long loan terms (up to 25 years) and low-down payments, there is now no limit to the number of SBA 504 Green Energy projects, or the aggregate dollar amount outstanding. That means businesses can go green without worrying about SBA's typical lending limits.

More Businesses Qualify
Small businesses previously too large to benefit from SBA 504 financing may now find themselves eligible, opening avenues for growth and innovation. Eligible businesses now include those with a tangible net worth of not more than $20 million (up from $15 million), and average net income after federal income taxes for the two full fiscal years before the SBA application date of not more than $6.5 million (up from $5 million).

About the SBA 504 Loan Program 
The SBA 504 Loan Program is an economic development tool that provides small businesses with long-term, fixed-rate financing.  These loans are most frequently used to acquire land, buildings and/or equipment; to construct, expand and/or renovate buildings; or to refinance commercial mortgages. A 504 loan has a 10-, 20- or 25-year term with a fixed rate for the loan term. Pairing the fixed rate with these term lengths gives small business owners stability, allowing them to budget and manage cash flow without concerns about rising rates or balloon payments.

SBA-certified development companies (CDCs) facilitate the 504 Loan Program. Typically, small business borrowers make a 10% down payment, a bank or credit union finances 50% of project costs in the first lien position, and a CDC finances 40% of project cost in the second lien position, which is guaranteed by the federal government.

About Growth Corp
Small Business Growth Corporation (Growth Corp) is a nonprofit, mission-based lender dedicated exclusively to connecting small businesses with quality expansion capital through administration of the SBA 504 Loan Program. With a commitment to economic development, job creation and the small business sector, Growth Corp is ranked a Top 10 National CDC for SBA 504 loan volume and is Illinois' largest 504 loan provider.   

Media contact:
Sara Vanhala
217.891.1813
[email protected]

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SOURCE Small Business Growth Corp