SBA 504 Loan Program
The Vision: A Vibrant Healthy Economy
Our Goal: To foster economic development and assist businesses in creating and retaining jobs.
SBA 504 Forms
- SBA 504 Loan Application
- Statement of Personal History - SBA Form 912
- Personal Financial Statement - SBA Form 413
- SBA 504 Fee and Deposit Agreement
ABOUT THE SBA 504 LOAN PACKAGE
Big Sky Economic Development Corporation [Big Sky EDC] is accredited by the US Small Business Administration (SBA) as a Certified Development Company (CDC) for the State of Montana.
The SBA 504 Development Company loan program is a long-term financing tool used by eligible small businesses. The program provides long-term, fixed rate financing for major fixed assets, such as land and buildings.
The typical structure for an SBA 504 loan is 50% of the project costs financed through a private lender having a senior position on the collateral, 40% of the project costs financed with SBA through a Certified Development Company (Big Sky EDC ) having a junior lien position on the collateral and at least a 10% owner equity contribution. The maximum SBA portion of the loan is $5.0 million. Eligible manufacturers may receive up to $5.5 million.
It’s A Good Deal
For the BORROWERS - Conserve CASH FLOW
- Low down payment - typically 10%
- Conserve cash flow for operations
- Competitive, Fixed, Long-term rate
For LENDERS - LOW RISK
- Low Loan to Value - secure collateral position
- First Lien Position, SBA takes subordinate position
- Lender sets own rates and terms
Big Sky EDC - MAKES IT EASY
- Works directly with the client
- Packages, processes, closes and services the SBA 504 Loan
- Utilizes job creation to define loan size for SBA portion
SBA 504 Eligible Uses Include But Not Limited To:
- Purchase of land & improvements. Construction of new facilities or modernizing, renovation or conversion of existing structures. Company must occupy 60% of new and 51% of existing buildings.
- Machinery and equipment with a 10-year minimum useful life.
- Other uses available, contact for information
SBA 504 is permanent financing - not used for construction or interim lending
Rate & Terms
- Fixed 20-year rate on the SBA 504 portion is tied to the 10-year Treasury bond rate
- Private lender sets own rates and fees.
- Loans are 10 or 20 years.
- RE = 20 year note Equipment only = 10 year note
Fees & Payments
- Most all SBA 504 loan fees are added to the loan amount and amortized over the loan term.
- One time processing fee - approximately 2.65% of SBA's portion
- Loan closing fees - approximately $2,500
- Ongoing service fee included in the effective full-term rate
Contact Big Sky Economic Development for additional information and questions regarding the following programs.
Big Sky EDC Revolving Loan Fund
For the Borrower
- Funds available for fixed assets, inventory, working capital
- Low origination fees
- Competitive fixed five-year interest rate
Lenders First Lien Position
- Existing businesses - with operating history
Yellowstone County Tax Incentive Programs
- Remodeling, Reconstruction Or Expansion Of Building Structures - 5 Year Abatement
- New & Expanding Industry Program - 10 Year Abatement
Montana Board Of Investments Infrastructure Loan Package
- Loan funds infrastructure projects that provide facilities/services to basic sector businesses