Borrowers can benefit from a low down payment, fixed interest rate and the long terms available through the program.

Lenders benefit from an excellent loan to value ratio, no restrictions on their rates, less paperwork and low fees. In addition, lenders can often participate in projects which exceed their lending limit and have the federal government as a subordinate lender.

The SBA 504 Loan Program involves a partnership between the SBA and Lenders. Typically, Lenders loan 50% of the eligible project costs, the SBA lends 40% and the borrower injects the remaining 10%.

In some cases, the SBA may require that the borrower inject as much as 20% reducing the SBA portion to 30%.

Small businesses with a net worth of less than $15,000,000 and an average income, after taxes, of less that $5,000,000 are eligible. Income is averaged over a 2 year period.

The East Texas Regional Development Company is limited to 40% of the total project cost up to a maximum loan of $5,000,000. In certain cases, that maximum amount can be raised to $5,500,000. This can translate to a total project of approximately $12,500,000.