504 Loan Program
As a certified development company, Lake Agassiz Development Group has been originating SBA 504 loans for small businesses across North Dakota since 2004. The SBA 504 program is designed to help start-up and expanding small businesses thrive and create jobs. The program provides long-term, competitively priced fixed-rate loans for major fixed assets to businesses which have a high probability of success in the marketplace.
Working in conjunction with qualified lenders, A typical 504 loan structure is:
- 50% qualified lender in 1st lien position
- 40% SBA 504 in 2nd lien position
- 10% equity injection
- New business or special purpose building requires 15% equity injection
- New business and special purpose building requires 20% equity injection
Benefits of the SBA 504 Program
- Long-term, fixed rate financing
- 20 years on real estate; 10 years on equipment
- Low equity injection, preserving working capital
- Short-term assets remain lien-free to support other financing needs
- Flexible ownership options allow borrowers to choose the ownership structure that works best for them.
- Excellent loan-to-value; typically 50% or less
- Alleviates legal lending limit concerns
- Pricing flexibility on first mortgage portion
- First mortgage portion may be sold on secondary market.