The SBA 504 Loan Program is used to finance the purchase of fixed assets, including owner occupied commercial real estate and equipment. Often referred to as a 50/40/10 loan, the program offers up to 90% financing for existing businesses. Typically the First Trust Lender (in our case, First National Bank Small Business Finance) would provide 50% financing, an arm of the SBA called a Certified Development Company (CDC) provides 40% financing, and the borrower injects 10% of the project cost in equity.

The SBA 504 Loan Program typically has terms up to 20 years with a fixed rate on the CDC portion. At First National Bank Small Business Finance, we typically offer a 25 year term on the First Mortgage with rates that adjust every 5 years. There is no minimum size for an SBA 504 Loan, and they can typically be used for projects up to $10 Million or more.

To be eligible for the SBA 504 Loan Program, a business must be for profit and fall within a size limit of having a tangible net worth of less than $15 Million and have had an average profit of less than $5 Million in the last two years. These loans are subject to underwriting by the bank, the CDC, and the SBA. SBA 504 loans have a job creation requirement of one new job for every $65,000 of loan proceeds.

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Four years ago, Southern Distilling Company was simply a dream shared by lifelong Iredell Country resident Pete Barger and his wife, Vienna. They teamed up with a Business Development Officer to make their dream a reality.

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