Operate as a for-profit company in the United States or its possessions
Be owned by US Citizens or LPR ("green card") holders
Have a tangible net worth of less than $20 million
Have an average net income of less than $6.5 million after federal income taxes for the two years preceding your application
Pass credit underwriting by IDS Corp. with the SBA's concurrence

Frequently Asked Questions (FAQ)

A 504 loan can be used to finance a range of assets that promote business growth and job creation. These include the purchase, construction, or improvement of:
- Existing buildings or land
- New facilities
- Long-term machinery and equipment with a useful remaining life of a minimum of 10 years
- Consolidating/refinancing debt under very specific conditions
- Historic Properties, single-purpose structures, and start-up businesses; have special conditions
A 504 loan cannot  be used for:
- Working capital or inventory
- Speculation or investment in rental real estate
- Multi-family housing
The typical 504 project involves a bank or other lender (the "Third Party Lender") and a Certified Development Company, such as IDS.
The final capital structure, consisting of two loans and an equity tranche, is based on the total project cost, and with some variation is:
50% Third Party Lender, at market rates/fees/amortization and a minimum term of seven to ten years.
40% CDC, at a rate set by auction generally well below the Wall Street Journal's Prime rate, fixed and fully amortizing for a period of either ten, twenty, or twenty-five years. Fees are set by statute and are financed into the project.
10% Borrower, injected as equity or under specific conditions, subordinated debt.