Ocean State Business

Development Authority, Inc.

SBA 504 Loan

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Rates and Terms

The rate on the SBA 504 portion is set when the CDC sells the debenture bond to fund your loan. The rate is then fixed for the loan term. 504 bonds are amortized securities. For comparable rates, look at treasury rates.

The OSBDA portion has two options: 10 or 20 years depending on the life of the asset being financed.

Collateral

OSBDA/SBA takes a subordinate (second Mortgage) to secure its 40% portion of the financing, and takes a security interest in assets financed. Other assets of the business or principals are generally not required (unless the company is a startup or the credit is usually risky or the asset being financed is considered a single purpose asset or does not appraise high enough).