Home
About Us
Typical Loan Structure
Who Qualifies
What Qualifies
How To Begin
Announcements
504 Updates
Fact Sheets
Biographies
Contact Us

 

 

 

 

 

 

 

 

  A loan structure to keep a company strong

The SBA 504 loan program provides businesses with long-term, below-market fixed-rate, subordinated loans to purchase real estate, build, expand and renovate or make leasehold improvements to buildings or purchase machinery and equipment.  The program requires only a small cash down-payment thereby preserving the business's working capital.  The purpose of the 504 loan program is to create or retain jobs in growing small or mid-sized firms.

Chesapeake provides 504 financing by issuing a SBA-guaranteed debenture for up to 40% of the total cost of the project.  A commercial lender selected by the borrower (or referred by Chesapeake) provides financing for at least 50% of the project.  The borrower provides the remaining 10% in the form of equity or subordinated debt.  For new businesses and some special purpose buildings, the minimum investment form the borrower increases to 15% or 20%.

The maximum amount of 504 financing which Chesapeake can provide is $5,000,000 (up to $5.5 million for qualifying green projects) and the minimum is $200,000.  There are no restrictions on the total project size.

An example of a typical structure is financing provided by Chesapeake to a family amusement center in Westminster, MD with laser tag, mini glo-golf, bumper cars, batting cages and attractions.  The project is the purchase of their property and upgrading their facilities for growth. The uses and sources for the project were:

Purchase

$ 2,410,000               

Renovation

378,000               

Equipment/other

462,000               

Uses

$3,250,000               


Bank - 1st deed of trust


1,625,000       50%

SBA 504 - 2nd deed of trust

1,300,000       40%

Owners - 10%

325,000       10%

Sources

$ 3,250,000               


Typical Loan Term

  Private Lender   SBA504 Applicant
Percent of project 50% 40% 10%
Collateral 1st mortgage 2nd mortgage --
Dollar amount no limit $100,000 to $5,000,000  --
Interest rate market below market and fixed  --
Real Estate terms 10+ years 20 years  --
Equipment terms 7 years 10 years --

 


John Sower
President
1101 30th St NW #500
Washington, DC 20007
Tel: 202-625-4373
Fax: 202-342-0389
jsower@chesapeake504.com
Tom Turner
Sr. Vice President
1101 30th St NW #500
Washington, DC 20007

Tel: 410-564-9085
Fax: 202-342-0389
tturner@chesapeake504.com


     
legend blue 11slebron 11michael kors outletjordan 11 legend bluejordan 11 legend blueblack infrared 6sjordan 11 legend bluelouis vuitton outletNike kd viilegend blue 11smichael kors outletjordan 6 black infraredlouis vuitton outletbeats by dre outletmichael kors outletlegend blue 11sbeats by dre cheapjordan 11 legend bluemichael kors outletmichael kors outlet