504 Program

SBA 504 Loan Program

Description
Preferred Lending Partners’ business financing programs are designed to grow your Serving All of Coloradocompany and move your plans from the page to the real world.  Preferred Lending specializes in heavy equipment, and commercial real estate financing through the SBA 504 program. United States Small Business Administration (SBA) 504 loans are designed to help small business owners who want to improve their operation by adding, acquiring, expanding, or constructing commercial real estate.

The SBA 504 program also allows for a limited amount of existing debt to be refinanced, if the debt is on 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, and in all ways, Preferred Lending Partners is the direct lender for the SBA 504 loan program.

Your business needs may be met by the SBA 504 program.  If you are unfamiliar with SBA 504 loans, take a moment to read about it on the SBA website here.  If you have questions, contact our office and one of our team members will be happy to 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 in the military, 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 to our country, we are offering the VetLoan Advantage Program which offers assistance 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. Our current interest rate can be found on our home page

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 with in-house lending limits. 
Realtors
  • The SBA 504 increases the number of prospective buyers for the property because it reduces the down payment requirements for the purchasing business and reduces the risk for the primary lender. This allows borrowers to consider properties they otherwise could not afford.
  • PLP’s experience in pre-qualifying borrowers will save you time so that it is concentrated with eligible and qualified buyers.
  • PLP’s staff work directly with the bank of your or your prospects’ 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 because the buyer is only required to put 10% down. This reduces the need of the purchaser to use other security or to raise additional cash. And in some cases eliminate the need for a seller carry a note for a portion of the “typical” down payment. Further, the borrower is also more amenable to paying a higher price because the cash flow impact of the loan. As a result, the program opens more of the market to a larger number of potential buyers.