Did you know the SBA 504 loan program isn’t just for commercial real estate property? It can be used to finance machinery and equipment which is being acquired by a business for use in its operations. The useful life of equipment must be at least 10 years and excludes rolling stock.

The financing of the machinery or equipment can include all costs associated with the purchase, transportation, dismantling and installation. The structure of the loan is similar to the real estate loan structure, with a 10% contribution from an existing business, 50% from a financial institution and 40% from Big Sky Finance thru the SBA 504 loan program. Not only is the business contribution just 10% but if they are upgrading their machinery or equipment, they may use the “trade in” allowance given on the old machinery or equipment as part of their contribution. 

There is a minimum total project cost of $125,000 but there is no upper limit. The 504 loan will be a fixed interest rate with a term matched to the useful life of the equipment, 10, 20 or 25 years.

Do you know a small business that should take advantage of the low contribution and rates for a machinery or equipment loan? Contact Jo Ann or Brandon today!