Whether you are starting a business from the ground up, or improving on what you already have, Small Business Administration (SBA) 504 loans can be ideal to help you grow your business. These loans are a cooperation between the SBA, a commercial lender, and you. You benefit because the program allows for less capital investment from you, with loan financing or refinancing at lower, long-term, fixed rates.
SomerCor helps you obtain the SBA 504 loan, which provides financing or refinancing for up to $5.5 million of your overall loan – as much as 90% of the total project cost (see the pie charts below).
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Septemer 2023
25 Year 6.81% | 20 Year 6.86%
Rates include monthly servicing fees to CDC, SBA, and central servicing agent; based on SBA FY23 fees. SBA 504 refi rates are approximately 2 basis points higher than debenture pricing noted above.
ELIGIBLE USES
- Purchase commercial real estate
- Build or renovate commercial property
- Buy equipment, machinery and fixtures
- Refinance debt for commercial property and equipment
- Pay eligible soft costs and professional fees
BENEFITS TO YOU
- Lower down payment
- Up to 90% financing
- Long-term, below-market fixed interest rates
- Refinance with potential 20% cash-out
- Predictable monthly payments
- No balloon payments
REQUIREMENTS
- Owner-occupied commercial real estate in Illinois
- At least 51% applicant occupancy (60% for new construction)
- For-profit business
- Under $15 million in tangible net worth
- Prior 2 years average after-tax net income under $5 million
- Able to meet the down-payment requirement
- Good credit history
TYPES OF BUSINESSES
- Manufacturing, industrial and commercial
- Hotels, gas stations and storage facilities
- Business and medical office buildings
- Most franchises
HOW THE SBA 504 LOAN WORKS
Existing business, general purpose building

New business or single purpose building

New business in single purpose building

Process
1
Business wants to buy, expand or refinance a commercial building or heavy equipment
2
Works with SomerCor to ensure eligibility and project structure
3
SomerCor underwriting process for internal approval
4
Project sent to SBA for loan authorization; typically subject to acceptable appraisal and environmental reports
5
Bank closing on total project financing including SBA portion
6
SBA closing (quick for turn-key: approximately 60 days after all project costs incurred and/or construction complete)
7
SBA debenture funding approximately 30 days after SomerCor closing. Once the project funds, the project will transfer to the SomerCor servicing department

