The National Association of Development Companies (NADCO) publicized that SBA’s 504 loan program will be offering the greatest number of loans to American Small Businesses during the month of September in 2012.
SBA 504 loan program is intended to help small businesses find long term financing for the purpose of real estate purchase, equipment purchase and purchase of other assets. The 504 program comes with a first mortgage from a private-second lender that covers 50 percent of the total cost involved. There is also an SBA guaranteed second mortgage that covers 40 percent of the cost. Then there is 10 percent equity from the borrower’s end.
Also, for the SBA 504 program, the September debenture sale will be $495 million in 20 year debentures and $53.1 million in 10 year debentures. The low rates of SBA 504 loan are an added benefit for business owners as entrepreneurs can conserve working capital, make plans for the future, and find sufficient capital to increase employment levels. The lending rate for small business borrowers on 20 year loan is approximately4.30%. Moreover, the 20 year debenture and 10 year debenture will be carrying the lowest interest rates in the case of borrowers.
NADCO is the trade association of CDCs through which small businesses find loans. The SBA makes funds available to the CDCs under its programs like the 504 loan program and several other SBA programs.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org