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Home SBA Loan Basics SBA Loan Requirements
SBA Loan Requirements PDF Print E-mail

US citizen ownership requiredA borrower for an SBA 504 loan may be a cooperative organization, corporation, partnership, or other legal entity organized in the United States. Furthermore, the borrower also may be an Indian tribe on a Federal or State reservation or other federally recognized tribal group, a public body, or an individual. The borrower must be engaged in or proposes to engage in a business that will: 1) provide employment; 2) improve the economic or environmental climate; 3) promote the conservation, development, and use of water for aquaculture; or 4) reduce reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems and other renewable energy systems. Individual borrowers must be citizens of the United States (U.S.) or reside in the U.S. after being legally admitted for permanent residence. Corporations or other nonpublic organizations must be at least 51 percent owned by persons who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence.

 

Proceeds from 504 loans must be used for fixed assets (and certain soft costs), including purchase of: existing buildings; land and land improvements (grading, street improvements, utilities, parking lots, landscaping); construction of new facilities; modernizing, renovating or converting existing facilities; long-term machinery; or refinancing debt in connection with an expansion of the business through new or renovated facilities or equipment. Proceeds cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing other than described in this paragraph. Fees may be financed with the loan.

Last Updated on Wednesday, 11 September 2013 16:33
 

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