Capital Access Corporation
Kentucky
SBA 504 Loan Program
US Small Business
Administration
• Fixed Interest Rates
• 504 Loan Program
• 10 or 20 year term
• 10% Borrower equity
Purpose of 504 Program
• Assist healthy & growing small businesses
by participating with lending institutions to
provide fixed-rate, long-term financing of
fixed assets.
• To provide long term fixed-asset financing
to eligible and healthy small businesses at a
reasonable rate.
Accessing the SBA 504 Loan
Program
• Capital Access Corporation – Kentucky will
provide access to the SBA 504 Loan
Program.
• Our geographic territory consists of;
Statewide
Eligible Businesses
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Project located in our territory
Business must be for profit
Business net worth less than $7 million
Average income for the last two years
cannot exceed $2.5 million
• Initial owner occupancy standard: 51% for
existing building, 67% for new construction
Eligible Projects
Fixed assets such as
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Land and new building construction
Existing building purchase
Building renovation
Machinery and Equipment
Project Size
• Minimum Maximum
• Project (Amount)
• $120,000
Unlimited
• CAC – Ky. (Amount)
• $50,000
$1,500,000*
*If a policy goal of SBA is met,
CAC – Ky. Loan can be
$2,000,000
SBA Public Policy Goals
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Rural Development
Business District Revitalization
Expansion of Exports
Minority Business Development
Woman Owned Business (51%)
Veteran Owned Business (51%)
Typical 504 Project
Fixed Asset
Lender
50%
$1,000,000
$500,000
40%
$400,000
(7 or 10 year minimum term)
CAC – Ky.
(10 or 20 year fixed rate)
Borrower
Total Project
10%
100%
$100,000
$1,000,000
Lender Loan
• If CAC – Ky.’s loan is 20 years, the bank loan
must be at least a 10 year term. Real Estate Loans.
• If CAC – Ky.’s loan is 10 years, the bank loan
must be at least a 7 year term. Equipment Loans.
• Rate negotiation are between bank and customer.
• Balloon payments are allowed
Advantages to Lending
Institution
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1st Mortgage on property financed
50% loan to value
Improved cash flow
CRA Credit
Capital Access Corp – Ky. Works directly
with the client
Advantages to Borrower
• Conserve working capital – 10% down payment
• Offset interest rate risk – 40% of project tied to
fixed rate
• Extended amortization provides lower monthly
payment
• Improved collateral position for bank often results
in more lending capacity for other needs and lower
rates
Rates
• Established at the time of the bond sale,
after the project is complete
• Typically lower than conventional
• Fixed for the life of the loan!
Predefined Prepayment Penalty
• Effective for first half of the loan
• For a 20 year note, starts at the note rate in the
first year and decreases 10% a year for 10 years
• For a 10 year note, starts at the note rate in the
first year and decreases 20% a year for 5 years
• Company incurs no penalty if prepays loan in:
- year 11 of a 20 year bond
- year 6 of a 10 year bond
Additional Program Specifics
• Personal resource test implemented
• Single purpose facilities required additional
5% equity injection
• Start-up businesses require an additional 5%
equity injection
• Job Creation standard of 1 job created for
every $50,000 Capital Access Corp – Ky.
Lends must be met
For More Information Call:
Capital Access CorporationKentucky
120 Webster Street, Suite 330
Louisville, Ky. 40206
(502) 584-2175