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Advantages of SBA 504 for the Small Business
1. The 504 provides longer term and attractive rate financing which matches the maturity of a loan to the useful life of the assests acquired with the loan.

2. The 504 provides lower down payment financing which enables the small business to keep its working capital investment in receivables and inventory where it earns a profit.

3. The 504 financing can reduce project risk. With debt service better matched to cash flow and with existing working capital invested into profit making receivables and inventory, the credit risk to the lender may be reduced. The net cost is generally lower than conventional financing.

Because 504 financing may be subordinated, lenders collateral risk is also reduced with reduced credit and collateral risk, a lender is more likely to participate and the small business is able to realize it's full growth potential.

Who is eligible and what can be financed using the SBA 504?

The borrower must be an owner user, be located in the state of Nevada, have a business net worth of less than $7.5 million, and net profit after tax of less than $2.5 million and financing can be for land, building, or equipment.

Fees

The SBA imposes no restrictions on the first mortgage lender's fees other than requiring the fees to be "legal" and reasonable.

New Ventures CDC may receive two fees for participating in a project?

* One-time Processing Fee on the debenture amount
* Annual Servicing Fee on the declining loan balance.

The SBA Central Fiscal Agent will collect these fees from the small business.

* One-time Funding Fee
* One-time Underwriting Fee
* Annual Servicing Fee on the declining loan balance.

SBA 504 Loans
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