The best candidate for the SBA 504 loan is a for-profit, privately held business.
It’s a product meant for business owners to create wealth through the ownership of commercial real estate. You can also finance heavy equipment through the SBA 504 loan. Businesses with less than $15 million of tangible business net worth are eligible for SBA 504 loans as long as they’re for-profit and privately owned. Businesses need to have averaged less than $5 million a year for the preceding two years of their net income. If you can check all these boxes off, then you’re an eligible candidate for a SBA 504 loan.
As far as limitations go, that’s pretty much it. The SBA 504 loan covers about 98-98.5 percent of all businesses that actually fall within the parameters of what’s eligible.
Now, we cannot work with not-for-profit businesses. It is very important that people hear me on this one: we don’t do not-for-profits and we don’t do publicly held companies.
Publicly held companies can assume a SBA 504 loan by acquiring a privately held company. That’s a practice that’s permissible within the program. However, the SBA 504 loan is ideal for business owners of small-to-mid-sized companies that are doing fairly well. Fountainhead Commercial Capital is a leading lender, and we can help take your business to the next level.