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

Borrower benefits:

  • 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.

Lender benefits:

  • 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.
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