Smarter SBA 504 Financing
Our SBA 504 loan product is highly competitive and among the best options available in the market for dental, veterinary, medical, optometry, ophthalmology, pharmacy, and healthcare practices. The Small Business Jobs Act (Bill 5297) has brought significant and positive changes to the program. One notable change is that refinancing is now allowed under the SBA 504 program, expanding its applicability beyond purchases. The maximum loan amount has increased to $12 million, encompassing both the first and second lien position loans.
The primary benefits of the SBA 504 loan include a low down payment of 10%, extended amortization periods of up to 25 years, and some of the most competitive fixed interest rates in the industry.
The SBA 504 loan structure consists of two parts: the first lien position loan, which is financed by a conventional bank, and the second lien position note, funded by the CDC (Certified Development Corporation) or SBA loan. The CDC loan segment offers fixed terms and is amortized over 25 years, with fixed periods ranging from 3, 5, 10, and 25 years. The conventional bank loan covers 50% loan-to-value (LTV), while the CDC loan covers 40% LTV. The remaining 10% is contributed by the borrower as a down payment.
Another noteworthy advantage of the SBA 504 loan relates to the calculation of the down payment compared to conventional loans. The down payment is based on the “total project cost,” which includes fees such as closing costs, third-party expenses, and renovation costs that can be rolled into the loan. In contrast, conventional bank loans typically calculate the down payment based on the purchase price alone, excluding additional fees and costs. This distinction significantly reduces the capital borrowers need to contribute, making it an important aspect to consider.
The USMF Smarter SBA 504 Loan is designed to assist dentists, veterinarians, physicians, optometrists, ophthalmologists, dermatologists, pharmacists, urgent care facilities, and ambulatory surgery centers in purchasing commercial real estate, preserving more cash within the practice, and offering long-term fixed rates with the lowest down payments available in the industry.
Benefits & Program Highlights
- Available in all 50 states
- Minimum credit score preferred at 650 (and lower with reasonable explanation)
- Loan amounts up to $12 million
- Low down payments start at 10%
- 24-hour pre-approval
- Practice must occupy 51% or more of the property
- All property types allowed
Terms of First Mortgage (Conventional Bank Loan)
- 50% LTV
- 25 years, fully amortized, fixed term
- Fixed, floating and adjustable rates are available
- Competitive fee structure
- Prepayment penalty applies & is set based on various factors
Terms of Second Mortgage (CDC/SBA Loan)
- 40% LTV
- 20 years, fully amortized, fixed term
- Fixed-rate is determined at SBA-guaranteed 504 Debenture sale
- Fee set by CDC
- Prepayment penalty for initial 10 years, none after the end of year 10
With our vast experience and abundant resources, USMF stands as the exclusive financing source within the healthcare industry that guarantees a smarter financing solution. No other bank or lender can match this level of commitment. You can trust USMF as your dedicated personal financing consultant.