UCB Your First Choice for
SBA Loans
SBA Loans
Purpose:
Provides long-term financing for major capital expansion projects with a fixed interest rate component.
Use of Loan Proceeds:
Proceeds can be used to acquire land, construct buildings, purchase and renovate existing buildings, and purchase long-term capital equipment.
Role of CDC:
Every 504 project requires the participation of a Certified Development Company (CDC). CDCs are authorized by SBA to provide second-lien financing behind a first-mortgage lender, such as UCB.
How the Program Works:
A 504 project will involve loans from both UCB and a CDC. The following are typical structures for projects utilizing the 504 program:
| Source of Funds | Existing Business AND Multi-Purpose Facility | Start up Business OR Single Purpose Facility | Start up Business AND Single Purpose Facility |
|---|---|---|---|
UCB Loan | Up to 50% of project cost | Up to 50% of project cost | Up to 50% of project cost |
SBA 504 Loan | Up to 40% of project cost | Up to 35% of project cost. | Up to 30% of project cost |
Borrower’s Equity | At least 10% of project cost | At least 15% of project cost | At least 20% of project cost |
(Note: SBA considers a business less than two years old to be a start up.)
Use of Companion SBA 7(a) loans:
The 504 and 7(a) programs can be used in conjunction. For example, a 504 loan can be used to construct a building, and a companion 7(a) can be submitted simultaneously to finance Machinery and Equipment, inventory, working capital, etc.
Member FDIC | Equal Housing Lender
