Below is a great example of rolling the cost of land, construction costs, and equipment into one 504 loan project to take advantage of the 504 loan program. In the example below, if the business would have been approved in FY 2019 and funded in the month of August 2019, they would have locked in an interest rate of 3.63% for 25 years. See the example details below:
A local franchiser of a national fitness chain purchased vacant land over two years ago and is going to construct a new fitness center and office space for his local headquarters. The borrower chose to use a combination of real estate equity and cash to contribute 15% of the total project cost and take advantage of the 25 year debenture. The entire building will be occupied by the operating company.