Small businesses have different loan options available through Commercial Lending Corporation. In addition to the conventional programs used by larger organizations, small businesses also have access to programs backed by the U.S. Small Business Administration. These programs are specifically designed to help small businesses with special incentives in order to help owners make their operations successful.
One type of small business loan program is the SBA 504. This program allows you to obtain financing for buying specific fixed assets, such as equipment, machinery, and buildings. The purchase of these items by the business owner through SBA 504 is often well below current market rates. There are specific requirements in order to qualify for a SBA 504 loan program. The requirements vary, based upon the kind of fixed asset being purchased. For example, if you are purchasing an existing building, you must use at least 51 percent of the space for your operations. On the other hand, if you are constructing a brand new building, you are required to occupy at least 60 percent of the facility, initially, and at least 80 percent, once construction is completed for your sole operations.
How the 504 program is designed allows for the loan to be distributed between three different parties. The business owner has to contribute 10 percent of the purchase price. The lender who underwrites your loan through Commercial Lending Corporation (CLC) provides 50 percent of the purchase price. The remaining 40 percent is obtained through a Certified Development Company (CDC). CLC is also able to help you find a CDC willing to supply their portion of the purchase price. CDCs are non-profit organizations whose primary purpose is to help small business owners and promote economic development in local communities.
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