Buy or construct commercial real estate with the SBA 504 loan program

Does your growing business need more space? Or could your company benefit from renovating and/or expanding your current facility? The U.S. Small Business Administration’s 504 loan program provides a great option for long-term financing for the purchase and renovation of real estate.

The program is designed to help small businesses with favorable financing terms, such as a low interest rate and lower equity injection requirements. These loans are typically structured with First Utah Bank covering 50 percent of the total project costs, the borrower covering 10 percent of the total project costs, and the SBA covering the remaining 40 percent of the total project costs. Projects larger than those allowed by the SBA 7(a) Loan Program may be accommodated through this program in some cases.

The 504 loan program cannot be used for working capital or inventory or for investing in rental real estate. It can be used to purchase eligible real estate — both raw land and existing buildings — and long-term machinery and/or equipment. The real estate purchased with a 504 loan must be occupied wholly or in great part by the business taking out the financing. The loan program can be used to fund improvements, both interior and exterior, to a company’s existing building or to build a new one.

Most 504 loans go to credit-worthy existing small businesses. Have questions about this loan program? Our Business Lending Team is available to help! Call us at 801-478-2300.