504 Program

SBA 504 Loan Program

Description
Preferred Lending Partners is a Certified Development Company (CDC) specializing in the United States Small Business Administration (SBA) 504 Loan Program.  504 loans are designed to help small business owners improve their operation by adding, acquiring, expanding, or constructing commercial real estate.

The 504 program also allows for a limited amount of existing debt to be refinanced, the debt must be an eligible fixed asset. This part of the program allows your business to expand, which includes any Project that involves the acquisition, construction or improvement of land, building or equipment for use by the small business applicant. *For additional details please contact your team at Preferred Lending Partners.

Preferred Lending Partners processes, approves, closes and services the loans. Funding is arranged by Preferred Lending Partners issuing a bond. Preferred Lending Partners is the liaison for the SBA regarding all aspects of the 504 program.

If you are interested in more specifics regarding the SBA 504 program we encourage you to visit the SBA website here.  If you have questions, contact our office and one of our knowledgeable team members will happily walk you through the process.

Local business growth is vital to Colorado’s future and to the future of our nation.  Our innovative commercial financing helps local business owners become tomorrow’s business leaders!  Let’s work together to get you there.

VetLoan Advantage Program
While deployed, our service men and women engage in many duties and experiences which translate into valuable skills as business entrepreneurs. As an acknowledgement to their service, we are offering the VetLoan Advantage Program.  This program offers special intensives to these business owners. Please speak with one of our business development officers for more details.

Benefits

Borrowers
  • Low down payment: A down payment as low as 10% allows the borrower to preserve cash for working capital.
  • Fixed interest rate on the SBA 504 portion: Borrowers will not have to worry about the prime lending rate going up. The amount of the mortgage payments will be the same for the next 20 years!
  • Long term: SBA 504 loans are for 10, 20 or 25 years.
  • Low interest rate: The SBA 504 interest rate is typically below market. Current interest rates can be found on the home page.
  • Refinance qualified debt: Must meet SBA 504 Refinancing requirements 

Lender
For the banker you lend at a lower loan-to-value ratio with a lower risk because the SBA 504 loan is in second position.

  • PLP’s staff prepares all SBA forms, packages, closes and services the SBA loan.
  • The lending institution builds a stronger banking relationship by providing their customer the benefits of the SBA 504 loan, while maintaining a strong financial relationship.
  • The bank’s loan at 50% of project costs allows lenders to mitigate the risk of larger loans, especially in the instance of a borrower default.
Realtors
  • The SBA 504 increases the number of prospective buyers for the property. This is because it reduces the down payment requirements for the purchasing business.  It also reduces the risk for the primary lender. This allows borrowers to consider properties they otherwise could not afford.
  • PLP can pre-qualify borrowers, allowing all parties to save time if the borrower is ineligible.
  • PLP’s staff work directly with the bank of the clients’ choice to assemble the financing. Closing on the property typically occurs within 4-6 weeks of application which will speed up receipt of the realtor’s commission.
Sellers
The SBA 504 program can accelerate the purchase of the property as the buyer often only needs to put 10% down.  In some instances this eliminates the need for a seller carry note.  As a result, the program opens more of the market to a larger number of potential buyers.