MCIDC Business Financing Programs

SBA 504

Description: The SBA 504 is a direct loan program of the U.S. Small Business Administration that is available through the South Eastern Economic Development of PA (SEED Co. of PA). a regional, private, non-profit economic development company. SEED Co. of PA works with other economic organizations in Southeastern Pennsylvania to enable companies to access the 504 program.

Eligibility:

• For profit
• Less than 500 employees
• Net worth not to exceed $6 million
• Average net income after taxes not to exceed $2 million.

Eligible Uses:

• Building acquisition, expansion, construction
• Land and site improvements
• Machinery and equipment

Where to Apply: MCIDC office

Amounts:

• Forty percent of project cost (Start up and special use facility 35 percent)
• Maximum of $1,000,000 or $1,300,000 (Special cases)
• Minimum $80,000

Terms/Conditions:

• Twenty years for real estate
• Ten years for machinery and equipment
• Typically, fifty percent of the project costs comes from private financial institutions
• A conventional bank loan secured by a first lien on the assets
• Bank provides interim financing to the applicant from the date of settlement until the SBA 504 debenture is sold
• A minimum of ten percent comes from equity. In the case of a start-up company or a special use building, a minimum equity contribution of fifteen percent is required

Advantages:

• Less equity required
• Long term fixed rates