Utilizing an SBA 504 loan for the development of commercial property is one of the smartest decisions a small business owner can make.  The SBA's 504 loan program provides up to 90% of the total project cost (including land, construction or renovations, soft costs and closing costs) at long-term below-market interest rates. 

Funding comes from both the SBA, through a network of 260 CDC's (Certified Development Company) and a third party lender (not necessarily a bank) originating the loan.  The equity requirement for the borrower is as little as 10% and not more than 20% of the total project cost.  The SBA/CDC provides up to 40% (up to $5 million, or $5.5 million for businesses and manufacturers creating energy efficient operations), and the lender provides the remaining 50%.  Existing SBA limits allow a project cost of as much as $12 million dollars (slightly higher limits in certain cases as above). 

In a construction project funded through the SBA 504 program the 40% from the SBA/CDC and the 50% from the lender are not provided until the construction is complete.  This means that the borrower may need up to $10.8 million of interim financing.  Most lenders do not provide this required interim financing.  Broadway Capital stands ready to provide the required interim financing so that a borrower may take advantage of the SBA's 504 loan program.