SBA 504 Program

Eligible Borrowers

  • Organized as a for-profit business;
  • Business net worth cannot exceed $15 million;
  • Average net profit after taxes cannot exceed $5.0 million for previous two years;
  • Located, or planning to locate, in the United States; and
  • Owner-user of the project being financed (51% occupancy minimum if existing building; 60% occupancy if new construction).

Eligible Uses of Proceeds

  • Real estate acquisition, construction, rehabilitation or expansion;
  • Purchase and installation of machinery and equipment;
  • Associated soft costs;
  • Proceeds may not be used for working capital or inventory; and
  • In certain cases, refinancing of existing debt is eligible.

Loan Rates and Terms

  • Rates on SBA 504 loans are set monthly and are based on the current market rate of ten and twenty year U.S. Treasury bonds (plus an increment).  The rate is fixed at closing for the life of the loan.  See current rates; and
  • The SBA 504 loan is funded after a project is completed and interim (bridge) financing must be arranged.

Loan Amounts

  • The maximum non-manufacturing SBA 504 loan is $5 million. Certain small manufacturers are eligible for up to $5.5 million in SBA 504 financing.

Fee Structure

  • Vermont 504 Corporation charges a one-time processing fee of 0.5% of the SBA debenture. This, along with other fees required by the SBA, are rolled into the SBA 504 loan, thereby reducing out-of-pocket expenses; and
  • Prepayment penalties, which are reduced yearly and eliminated halfway through the loan term, apply to all SBA 504 loans.

Application Process

  • Applications are available from the VEDA office in Montpelier or can be downloaded from VEDA’s website by clicking here;
  • Once received, applications will be evaluated promptly by Vermont 504 Corporation staff.  The Vermont 504 Loan Committee meets weekly to review loan requests; and
  • SBA approval is generally obtained in 3-7 business days.

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