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SBA 504 LOANS

In partnership with our sister corporation Valley Small Business Development Corporation, a Certified Developement Corporation, California Capital facilitates SBA 504 Loans, a long-term fixed rate financing tool for economic development within a community.

What Funds May Be Used For:
Fixed asset projects such as: purchasing land and improvements, including existing buildings, grading,
street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.

Terms, Interest Rates and Fees:
Interest rates on 504 loans are pegged to an increment above the current market rate for five-year and 10-year U.S. Treasury issues. Maturities of 10 and 20 years are available. Fees total approximately three (3) percent of the debenture and may be financed with the loan.

Collateral:
Generally, the project assets being financed are used as collateral. Personal guaranties of the principal owners are also required.

Eligible Businesses:
To be eligible, the business must be operated for profit and fall within the size standards set by the SBA. The business qualifies as small if it does not have a tangible net worth in excess of $7 million and does not have an average net income in excess of $2.5 million after taxes for the preceding two years.

Restrictions:
The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.