504 Q&A

Q - Does the third party lender (the bank, non-bank lender, etc.) in a 504 loan project have to be on the Small Business Administration’s (SBA) approved lenders list?

A - No. A major difference between the SBA’s 7a program and the 504 program is the fact that any responsible financial institution or individual can act as the third party lender and take advantage of the 504 benefits without being first approved by the SBA. Under the 7a program, the lender first must be approved by the SBA before it can participate.

This is just one of the many advantages to lenders when using the 504 program to finance purchases and improvements of real property and the purchase of long-life machinery and equipment.

If you have a question you’d like FFCFC 504 experts to answer, email it to insider@ffcfc.com.