Small to Mid-Size Manufacturers

Many small to mid-size manufacturers find the 20% down payment often required in a conventional loan takes too much of their working capital.  There is another way!  The 504 Loan Program is designed to help manufacturers acquire fixed assets such as commercial real estate or heavy machinery and/or equipment without high cash outlay requirements often associated with conventional financing programs.

Loan Structure:
There are three players with the 504 - a bank or credit union, Growth Corp and the borrower.  In most cases, the structure is:

• 50% - Conventional Loan
• 40% - Growth Corp's 504 Loan
• 10% - Borrower Equity

Program Benefits:

• Up to 90% financing at fixed rates with long amortization terms (20 years for real estate and 10 years for equipment)
• Loan amounts up to $5.5 million for manufacturing and green initiative projects (SBA amounts only - NO LIMIT on overall project size)
• Debt refinancing for existing debt (must be 504 eligible assets) when there is a new fixed asset financing request

What Qualifies:

• Manufacturers with a tangible net worth of not more than $15 million and a two-year average net income (after taxes) of not more than $5 million
• Must meet the definition of a small to mid-size manufacturer as classified in sector 31, 32 or 33 of the NAICS
• Fewer than 500 employees
• Must be for-profit and have all of its production facilities located in the U.S.
• Must meet occupancy guidelines (at least 51%)

504 Highlights:

• Fixed interest rates - no balloons
• Up to 90% commercial financing
• Amortization terms up to 20 years
• Can be used for real estate purchase, construction, expansion, renovation, machinery & equipment, furniture & fixtures (10%), professional fees, interim interest, appraisal & environmental and debt refinance in some cases
• Fees and other up-front costs can be financed in the loan
• Loans up to $5.5 million for manufacturing and green initiative projects (SBA amounts only - no limit on overall project size)

Why Growth Corp:
Growth Corp is a not-for-profit organization authorized by SBA to marshal the 504 Loan Program.  Growth Corp focuses exclusively on economic development and job creation and is the largest 504 lender in Illinois, currently servicing a portfolio of over $670 million.  We have experienced loan officers across the state that would be happy to assist you with your 504 project.