This SBA Loan video highlights what funds from a SBA 504 loan can be used for. For easy reference, see the full transcript below the video.
Now that we’ve discussed who is eligible for the program, let’s go over what the small business administration loans can be used for:
SBA 504 loan funds may be used to:
-Purchase new or existing buildings
-Purchase machinery & equipment
-Most “soft” costs related to a project (appraisals, loan fees, construction line interest, etc.) can be included in the total project costs to be financed. An exhaustive list of eligible soft costs can be found on SBA’s website (SBA.Gov).
In addition, there is some level of refinancing allowed when included with an expansion project that involves investment in fixed assets. For example, you may be able to roll your existing building loan into a larger expansion project that involves adding on to your building.
Recent government initiatives have also resulted in a temporary refinancing program until Sept 27, 2012. Under this temporary program, a qualifying business can utilize the 504 SBA program to refinance existing, qualified debt to lower their interest rates, improve terms, or acquire additional working capital. This temporary business loan refinancing program can provide refinancing of up to 90% of the appraised value of available collateral.