When offering your real estate customers a long-term, fixed rate financing option using the SBA 504 loan program, knowing whether your borrower is considered an “Existing Business” or a “New Business” is key. Having these details early will help in fine-tuning your financing proposal as it relates to required documentation, collateral, and down payment support.  

• For both the 7(a) and 504 programs, SBA considers a business to be “New” if it has been in operations for two years or less (from the first generation of income) at the time the loan is approved or if there is new, unproven ownership/management within the last two years.