Lender Resources

An SBA 504 loan offers benefits to both borrowers and lenders. The subordinate financing structure reduces risk for lenders through lower loan-to-values and lower reserve requirements.  The low down payment and long-term, low fixed-interest rate puts financing within reach for businesses that may not qualify for conventional loans.

Benefits to Lender:

  • With a 50% loan-to-value ratio, the lender is able to reduce the risk of lending to small businesses.
  • There are no fee or interest rate restrictions on the lender’s portion of the 504 loan.
  • Lenders faced with loan limit restrictions can spread capital among more small business borrowers.
  • Since the 504 loan package is prepared by EDF, the lender saves on time and labor costs.
  • Lenders build stronger banking relationships by providing their customers the benefits of 504 loans.
  • Through participation in 504 financing, the lender is able to demonstrate CRA compliance and involvement in community lending and development.