The objective of the SBA 504 program is to achieve community economic development in Rexburg, Idaho Falls, and surrounding counties; through job creation and retention by providing long-term fixed asset financing to small business concerns in SBA 504 Loans.

Terms

• The SBA may guarantee up to 40% of an eligible project, not to exceed $1,500,000 ($2,000,000 in rural areas). The small business concern is required to inject at least 10% of the project (15% if a new start up and/or 20% if a limited use building). The Private Lender must provide the remaining percentage, usually 50%.
• The funds for the 40% portion of the project are obtained by the sale of a Debenture (or type of Bond), which is pooled through a certificate mechanism, and sold privately to investors nationwide. The Debenture is guaranteed 100% by the SBA.
• Interest rates are fixed for the term of the loan, and are based on current market rates for 5 and 10 year Treasury issues, and are priced at the time of the Debenture sale. Machinery and Equipment terms are 10 years, and Real Estate terms are 20 years.
• Eligible businesses include those with under 500 employees, or who have a Net Worth of less than $8.5 million and a Net Profit of less than $3 million. They must be for profit companies with a sound business purpose, and demonstrate significant economic impact through the project.
• An eligible project can include: plant acquisition, new construction, renovations or expansion, acquisition of machinery and equipment, furnishings and fixtures, land and site improvements, and certain soft costs associated with the above.
• This program is effective in keeping the cash flow needs of the business low, and in creating a substantial economic impact for the local area.