Business in Utah!
The 504 Loan Process
Step 1: The Initial Meeting
Small Businesses who think the 504 Loan sounds like it would meet their needs should contact Utah CDC at (801) 627-1333 to set up an initial meeting. The following items should be prepared for the initial meeting:
Step 2: Prepare Loan Application
Working with the small business and a private-sector lender, Utah CDC prepares the application package for the Small Business Administration (SBA).
How long will this take? Once the required information is provided to the CDC, the loan application packaging process takes only 2-3 days.
Step 3: SBA Authorizes Your Project & Financing
The completed loan application package must be reviewed by the SBA. When they have approved the package, they will issue an Authorization approving the loan for funding.
How long will this take? Depending on the current workload at SBA, an approval normally takes 3-7 business days.
This means that with a complete package, and the help of Utah CDC, a small business could see an SBA 504 loan packaged and approved in as little as two weeks!
Step 4: Interim Financing
Once the SBA has approved the loan, the private-sector lender will provide interim financing for the purchase or construction project, up to 90% of the total project costs.
Step 5: SBA Loan Closing
Once the purchase of assets has taken place, or new construction is complete, Utah CDC will meet with the small business to finalize the closing documentation necessary for funding the SBA portion of the loan. The final package goes through CDC legal review and is presented to the SBA for funding.
Step 6: SBA Funds the 504 Loan
Approximately 45 days after finalizing SBA closing documents, the 504 loan funds are provided to the private-sector lender. Once the funds are in place, the small business has a first mortgage loan with the private sector lender for approximately 50% of the project costs, and a second mortgage with the CDC/SBA for approximately 40% of the project costs.