U.S. Small Business Administration 504 Loan Program
U.S. Small Business Administration 504 Loan Program provides fixed asset funding to for-profit businesses with a net worth not exceeding $15 million and net after-tax profit of not more than $5 million. A typical transaction consists of 50% bank financing; 40% SBA; and 10% equity. The SBA takes a second collateral position. This program is available from the Toledo-Lucas County Port Authority throughout Ohio.
Benefits include:
- Up to 40% of project costs for any for-profit business
- Maximum loan of $5 million or up to $5.5 million for manufacturers
- Term of either 10 or 20 years
- Only a 10% equity injection into the project is required
- Long-term fixed interest rates
504 Loan Refinancing For Eligible Small Business Assets Under the Jobs Act
Under the Small Business Jobs Act, the SBA will implement a temporary program - authorized until September 27, 2012 - allowing small businesses to refinance eligible fixed assets in its 504 program without requirement of an expansion, as is the case with typical 504 loans. This program will provide small businesses the opportunity to lock in long-term, stable financing, as well as protect jobs.
- SBA will launch this temporary program on February 27, 2011 and will begin accepting loan applications on February 28, 2011. The program will end on September 27, 2012.
- Borrowers can finance up to 90% of the current appraised property value, or 100% of the outstanding principal, whichever is lower, plus 504 eligible refinancing costs.
- SBA will initially open the program only to businesses with immediate need. Priority will be on those businesses potentially at risk because they face loan maturity or balloon payments before December 31, 2012. SBA will later revisit the program parameters, and may open the program to businesses with later balloon payments or that can demonstrate need in other ways.
- The program is structured like SBA's traditional 504 loan program: borrowers will work with third-party lending institutions and the Toledo-Lucas County Port Authority's Certified Development Company (Northwest Ohio Development Assistance Corporation) to obtain financing. A traditional loan structure would be a 10%/50%/40% split.
West Suburban Animal Clinic - SBA LOAN
The Toledo-Lucas County Port Authority partnered with Fifth-Third Bank to provide the West Suburban Animal Clinic two U.S. Small Business Administration 504 Loans in the amount of $652,000 for the purchase of land and equipment and the construction of a new facility located at 3265 N. King Road in Sylvania, Ohio. The clinic has a total of 12 employees and this project will create six new jobs.
West Suburban Animal Clinic was established in 2001. Dr. Gary Thompson is a partner in the clinic and serves as the Toledo Blade "Ask the Vet" commentator.
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