Expertise. Reliability. Service.

Call Us 763.784.3337 Apply

Main menu

504 Collateral Requirements

  • The 504 loan is typically secured with a subordinate lien on all project assets. 
  • The SBA 504 loan must have a security interest in all project assets. Existing prior liens can be recognized in the case of building expansions and renovations. 
  • Personal guarantees are required from all principals owning 20% or more of the operating company and borrowing entity . 
  • If the business is a start-up or the asset being financed is considered single purpose or the credit is unusually risky, additional collateral may be required. 
  • "Key Man" life insurance is typically required unless there is strong management succession.

Stay Informed

Receive rate updates and valuable business financing news. No junk, just valuable information.