SBA makes 504 loan available with 25-year debenture

Last month, in a widely praised and highly anticipated move, the Small Business Administration (SBA)  announced a new 25-year loan option through the SBA 504 Loan Program.

This new fixed rate option is now available and is in addition to the existing 10- and 20-year loans.

“On paper this gives small business owners 60 additional months in their payment cycle,” says LCD Group Loan Officer Tracy Whitney. 

“In reality this gives them an additional lifeline that lowers their monthly payments and gives them greater flexibility to better manage their cash flow.”

“If you are a small business owner who has been thinking about building or renovating, you need to seriously look at this 25-year option now. It really is too good to pass up. It can be so beneficial to so many small businesses,” adds Whitney. 

What is the SBA 504 Loan Program?
The SBA 504 Loan provides businesses with fixed-rate financing for the purchase of long-term assets. The 504 loan, or debenture, is made in conjunction with the borrower’s financial institution, which provides a first mortgage for up to 50 percent of the project cost. In many cases, the principal can qualify for a low down payment subject to eligibility requirements.

What assets can the SBA 504 fund?

  • Purchase of land
  • Construction costs on new construction
  • Construction costs for renovation projects
  • Equipment costs along with furniture and fixtures
  • Professional fees, such as engineering, architectural, etc.
  • Leasehold improvements

Eligible Applicants:

  • Business entity classified as a for-profit small business
  • Applicant can be a corporation, partnership, proprietorship, LP, or LLC
  • Tangible net worth of not more than $15 million, including affiliates
  • Average after-tax profit of not more than $5 million for each of the last two years, including affiliates
  • Expansion related refinance of existing fixed asset debt

To learn more about the SBA 504 program, contact Tracy Whitney at (701) 667-7602 or at for more information.