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SBA 504 Loan Program

Commercial Lending for Small Businesses

What is the SBA 504?

The SBA 504 Loan Program offers financing for the purchase of fixed assets including real estate, buildings, and capital equipment. These small business loans offer below-market interest rates and are backed by a 100% SBA-guaranteed debenture for the 10- and 20-year programs. Small business owners may use a 504 Loan to grow and expand their businesses.

What is our role?

As an authorized administrator of the SBA 504 loan program, IBFS works with qualified businesses to develop, package, and process business growth projects. By partnering with Illinois banks and integrating client, bank, and SBA financing, IBFS helps businesses expand their operations.

What are the benefits?

SBA 504 Loans feature several key benefits for borrowers:
- Low down payments (typically 10-15%) help borrowers conserve valuable operating capital.
- Below-market fixed rates ensure no future rate fluctuations.
- Long-term financing promotes steady business growth.
- Fully amortized loans over 10 or 20 years help lower costs of capital for small business owners.

What kind of businesses receive 504 loans?

The SBA 504 can help businesses in many industries, including:
- Healthcare
- Manufacturing
- Service
- Retail
- Hospitality (Hotels & Restaurants)
- Construction

What is the loan structure?

Typical structure:
- At least 10% equity contribution from business owner
- Up to 50% from bank or third party lender
- Up to 40% from the SBA, via IBFS

Sample Loan

Example of financing on a typical $1 million project or equipment:
- Borrower's Equity: $100,000
- Bank/Lender: $500,000
- IBFS/SBA 504: $400,000

Ready to grow your small business? Begin the loan application process today!

SBA 504: Product
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