Please select from the topic areas below to see available questions and answers. If you would like to ask us any questions, please feel free to contact our office.
FAQ Topics:
General InformationAdvantages
Structure
Equity
Fees
Eligibility
Credit
General Information Questions:
- What is the SBA 504 loan program used for?
- How does the 504 program work?
- How does the lender partnership work?
- Will the closing be delayed if the 504 loan is used?
- Is Premier Capital Corporation part of the SBA?
- What if I have a project already underway, can the I switch to the 504 program?
- Is there a limit as to how much the 504 program will lend me?
- Can I use my current bank as the 504 partner?
Q: What is the SBA 504 loan program used for?
A: The program is a way for borrowers to access permanent financing for the purchase of real estate their business will occupy. It can also be used for the business’ fixed equipment if it has a useful life of at least 10 years.
Specifically, the program can be used to:
- Purchase land & existing building
- Purchase land and build a new building
- Renovate or expand the business’ existing building
- Purchase machinery & equipment with at least a 10 year useful life
- Make an asset based company acquisition
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Q: How does the 504 program work?
A: The lender typically provides 50% of the project’s financing, and Premier Capital 40%, leaving the borrower with a contribution of 10%.
return to top >Q: How does the lender partnership work?
A: Please view the SBA 504 Process page for information on this topic.
return to top >Q: Will the closing be delayed if the 504 loan is used?
A: With complete information and documents, we can pull together the loan package relatively quickly. The timing often depends on obtaining the appraisal and environmental reports as early as possible. All things being equal, Premier Capital routinely meets the demands of a 45-day turn around. We encourage you to bring us into the process early in order to discuss the project timing.
return to top >Q: Is Premier Capital Corporation part of the SBA?
A: No. Premier Capital is a private not-for-profit company that is authorized by the SBA to deliver and administer the 504 program for projects in the state of Indiana. Premier Capital was established in 1976 and is one of the top 504 lenders in the nation. There are approximately 250 such companies across the U.S. known as Certified Development Companies, or CDCs.
return to top >Q: What if I have a project already underway, can the I switch to the 504 program?
A: There is a nine month look back provision in the 504 program. Any expenses that have occurred in the past nine months can be included in the project.
return to top >Q: Is there a limit as to how much the 504 program will lend me?
A: Yes, however, there are no maximums on the size of the project, only on the portion that can be funded by the 504 program.
The limitations are:
- $1.5 million on most projects
- $2.0 million if the company has a majority owner and operator that is a veteran, minority, woman or if the business is located in a rural or other public policy goal area
- $4.0 million if the company is a manufacturing with NAICS codes of 31, 32, or 33
Q: Can I use my current bank as the 504 partner?
A: Yes, and the bank does not have to be located in Indiana.
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