The SBA created the 504 loan program to help entrepreneurs finance commercial real estate and equipment for their businesses. Businesses use these loans to finance fixed asset acquisitions such as:

• Purchases of existing buildings
• Land purchases and improvements
• New facility construction
• Existing facility modernizations,
  renovations, and conversions
• Long-term machinery purchases
• Some furniture and fixtures

Businesses in operation for 2 or more years can also use 504 loans to refinance existing debt that meets the following criteria:

• A non-federal loan
• Outstanding for 2 or more years
• Current on all payments for the last 12 months
• It was used originally (85% or more) to finance eligible 504 uses (see above)

The graph to the right shows how LiftFund partners with a participating lender (typically a bank) to finance part of the project. Most projects require a 50-40-10 (Bank Loan-SBA/CDC-Owner) split. However, businesses and/or projects considered “special purpose” require an additional 10% from the owner.