Need a Loan?
Consider the SBA-504 program.
Even as the credit market for small businesses continues to improve,  retail and restaurant owners looking for growth capital may want to check with the U.S. Small Business Administration (SBA). The SBA-504 loan program can help small and growing retailers and restaurants purchase commercial property or equipment, usually at below-market interest rates and with more favorable terms than traditional business loans.
Why It Works
Because the government guarantees 504 loans, they require less collateral. In fact, business owners have to come up with only a 10% down payment instead of the usual 20%, according to the SBA. The remaining 90% is financed by a bank and a certified development company (CDC), usually a local nonprofit with a mission to create jobs or stabilize a neighborhood through economic development. Another advantage? When the CDC is reviewing the loan request, it can consider future earnings projections, not just past cash flow, when deciding whether to approve the financing. This can be a significant benefit to small but growing businesses.
How it Works
To qualify for a 504, a business must: 
- Be a for-profit company
- Have a tangible net worth less than $15 million and an average net income less than $5 million after taxes for the preceding two years
- Plan to use proceeds for an approved purpose, such as financing the purchase of fixed assets, primarily real estate or equipment
- Be able to prove that the owners don’t have the means to finance the project from other sources, such as personal assets
- Show that it will be able to repay the loan from projected operating cash flow of the business
- Be of “good character” (in fact, the SBA requires a “Statement of Personal History” from all the principals in the business)
- Show relevant management expertise and a feasible business plan
How Much You Can Finance
Loan amounts are based on how the funds will be used. For restaurants, the typical loan falls under the “job creation” mandate. Typically you have to show that you will create or retain one job for every $65,000 you want to borrow, up to a maximum of $5 million.
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The newsletter you read was prepared for general information purposes only by Manifest and is not intended as legal, tax or accounting advice or as recommendations to engage in any specific transaction, including with respect to any securities of PNC, and do not purport to be comprehensive. Under no circumstances should any information contained in this newsletter be used or considered as an offer or commitment, or a solicitation of an offer or commitment, to participate in any particular transaction or strategy. Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation. Neither PNC Bank nor any other subsidiary of The PNC Financial Services Group, Inc. will be responsible for any consequences of reliance upon any opinion or statement contained here, or any omission. The opinions expressed in this article are not necessarily the opinions of PNC Bank or any of its affiliates, directors, officers or employees.
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