Financing Available: The lesser of $1,500,000 ($2,000,000 in certain situations) or 40% of project costs. Small Manufacturers qualify for $4,000,000 or 40% of project costs.
Use of Loan Proceeds: Fixed Assets: land, building, equipment
Term of Loan:
SBA portion: 10 or 20 years based upon economic life of assets.
Private Lender: at least 10 years on real estate and at least 7 years on equipment and leasehold improvements.
Rate of Interest: Approximately 1 - 1 1/2% above 5 and 10 year Treasury Note, respectively, on the SBA portion. Private Sector Lender--first mortgage to be made at market rate determined by private lender without SBA restriction.
Downpayment: At minimum 10%. New starts 15%.
(Special purpose buildings -- add an additional 5%)
Typical Structure:
| First Mortgage * 504 Debenture Local Injection Total 504 Project Cost |
50% 40% 10% 100% |
How Long Does It Take: SEDC reviews/approves the 504 application before it can be processed by SBA. SBA review period is 10 days from the receipt of completed application.
Collateral: Generally a lien on all fixed assets purchased with loan proceeds.
First mortgage--private lender. Second mortgage -- SBA.
Guarantees:
Corporate Guarantee required on personal loans.
Personal Guaranty required on corporate loans.
Eligible Businesses: Operating, for profit businesses.
Ineligible Businesses:
Passive income companies
Real estate companies
Developers/Landlords
Financial institutions
Unregulated media firms
Not-for-profit businesses
Job Creation Criteria: $50,000 of SBA 504 funds per one job either created or retained.
Fees: One-time costs amounting to approximately 2%-2.5% of the SBA portion (can be capitalized as part of the loan). Closing Costs are responsibility of Borrower.
Contact:
Siouxland Economic Development Corporation (SEDC)
1106 Historic 4th Street, Suite 201
Sioux City, Iowa 51101
Phone 712-279-6430
Email sedc@siouxlandedc.com
This institution is an Equal Opportunity Provider.