Category: Financial Blog

How small business owners can benefit from the SBA 504 loan program

Are you a small business owner looking to purchase or construct your own building? 

SBA 504 LoansMaybe you have considered the possibility of purchasing or constructing but are hesitant due to the traditional down payment requirements, interest rate risk, or general uncertainty in the economy. If so, the SBA 504 loan program could be the perfect solution.

Through the SBA 504 loan program, you can acquire your new facility with as little as 10% down, and lock in a low, fixed interest rate for up to 25 years on up to 40% of your project costs. While these features alone make this program a very attractive option, due to provisions included in the Economic Aid Act, this program is now more beneficial than ever. For new SBA 504 loans approved between 2/1/2021 and 9/30/2021, the borrower will be eligible to receive six months of payment subsidies up to $9,000 per month, and the elimination of some fees that can generally account for up to 2% of the total loan amount. With these two temporary measures, this can result in thousands of dollars in savings for the borrower!

General Program Overview

This SBA loan program is meant to assist small business owners with the purchase, construction or refinance of owner-occupied real estate, and in some cases, the purchase of equipment. The general loan structure includes the bank providing financing equivalent to 50% of the project costs, with the SBA providing financing of up to 40% (through a certified development company “CDC”), and the borrower contributing the remaining 10% of equity. In some situations, such as a special use property or new business, the borrower equity requirement is 15%, or 20% in the case of a special use property and new business. In these situations the SBA/CDC’s funding percentage would change (i.e. 50/35/15 or 50/30/20), as the bank is always at 50% of the project costs. However, the 50/40/10 split is most common.

Key Benefits of the SBA 504 Loan Plan

One benefit of the SBA 504 program is that the business’ down payment is as little as 10%, compared to a typical down payment requirement of 20-25% on conventional CRE loans.

Additionally, the SBA/CDC portion of the loan includes a fixed interest rate for the life of the loan, which can be up to 25 years. The average 20 and 25 year fixed rates on the SBA/CDC portion are much more favorable than typical CRE loan rates. For current loan rates, contact our commercial lending team.

With recent economic relief bills, the program is even more attractive than ever right now with the recently approved payment subsidies and fee eliminations on new loans approved between 2/1/21 – 9/30/21. Below are some additional details on these savings options.

6 Months of Payment Subsidies

New borrowers approved 2/1/21 – 9/30/21 will receive six months of payment subsidies (principal, interest and fees), capped at $9,000 per month, beginning with the first payment due after the loan has been funded by a debenture guaranteed by SBA and is in regular servicing status.

Fee Elimination

New borrowers approved 2/1/21 – 9/30/21 will also be eligible for the temporary elimination of the following fees:

  • 0.5% Third Party Lender Participation fee, and
  • 1.5% CDC Processing Fee

Combined, these two measures will result in significant savings for borrowers looking to buy, build, or refinance.

If you have questions about the SBA 504 loan program, one of our loan officers would love to have a conversation with you to discuss your options. Please contact Joe Donahue or Corey Martin to learn more about this great opportunity.

Joe Donahue

Joe Donahue

Vice President ,
Commercial Loan Officer

Corey Martin

Corey Martin

Vice President ,
Commercial Loan Officer

Protect Yourself Online: Tips for Identity Protection

Though the internet has many advantages, it can also make users vulnerable to fraud, identity theft and other scams. According to a Norton Cybercrime Report, 143 million U.S. consumers were victims of cybercrime in 2017. The American Bankers Association recommends the following tips to keep you safe online:

Keep your computers and mobile devices up to date.

Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.

Establish passwords.

A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters.

Watch out for phishing scams.

Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with.

Recognize and avoid bogus website links.

Cybercriminals embed malicious links to download malware onto devices and/or/ route users to bogus websites. Hover over suspicious links to view the actual URL that you are being routed to. Fraudulent links are often disguised by simple changes in the URL. For example: vs

Keep personal information personal.

Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc. Be wary of requests to connect from people you do not know.

Secure your internet connection.

Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it. Consider using a Virtual Private Network (VPN) app to secure and encrypt your communications when connecting to a public Wi-Fi network. (See the Federal Trade Commission’s tips for selecting a VPN app.)

Shop safely.

Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.

Read the site’s privacy policies.

Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere.

Source: American Bankers Association – Protecting yourself online

Protect Yourself from Data Breaches

Banks are national leaders in preserving the security of customer data. The industry dedicates hundreds of millions of dollars annually to data security, and adheres to strict regulatory and network requirements. The banking industry’s first priority is to protect consumers and make them whole.

In the event of a data breach:

  • Report any suspected fraud to your bank immediately.
  • Use online banking to protect yourself. Monitor your financial accounts regularly for fraudulent transactions. Sign up for text or email alerts from your bank for certain types of transactions, such as online purchases or transactions of more than $500.
  • Beware of phishing scams. Never give out personal financial information in an email or over the phone unless you have initiated the contact.
  • Monitor your credit report. Order a free copy of your credit report every four months from one of the three credit reporting agencies at

If you suspect your identity has been stolen:

  • Call your bank and credit card issuers immediately so they can start working on closing your accounts and clearing your name.
  • File a police report and call the fraud unit of three credit-reporting companies.

The fraud unit numbers are:
TransUnion (800) 680-7289
Experian (888) 397-3742
Equifax (800) 525-6285

  • Consider placing a victim statement in your credit report.
  • Make sure to maintain a log of all the contacts you make with authorities regarding the matter.
  • Write down names, titles, and phone numbers in case you need to re-contact them or refer to them in future correspondence.

For more advice, contact the FTC’s ID Theft Consumer Response Center at 1-877-ID THEFT (1-877-438-4338) or

Source: American Bankers Association – Data breaches

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