To be eligible for a SBA 504 loan, a business must satisfy these general requirements:

• The project must be located within the state of Illinois.
• If the project involves the purchase of an existing building, the business must occupy at least 51% of the space. In projects involving new construction, the business must occupy at least 60%-80% of the space.
• The business concern must be for-profit.
• The business must have a net worth of less than $7.5 million and less than $2.5 million in annual after tax profits.
• The business owner must be a U.S. Citizen or resident alien.
• If equipment is to be purchased, the expected useful life must be at least ten (10) years.

Eligible use of funds:

• LAND- The project may include land, regardless of how long it has been owned. Previously owned land may be counted towards equity at the purchase price, if purchased within 2 years. Any land purchased prior to this 2-year period must be appraised and the appraised value can then be counted toward your equity.
  
• LAND IMPROVEMENTS- Improvements such as grading, paving landscaping, curb and gutter work can also be included, up to 5% of the total project.
  
• PURCHASE OF EXISTING BUILDING AND BUILDING IMPROVEMENTS- The cost of purchasing and improving an existing building are eligible, as long as the purchase price meets an acceptable appraisal, and the business occupies at least 51% of the total space. The improvements can include heating, electrical, plumbing, facade expenditures and roofing costs.
  
• NEW BUILDING CONSTRUCTION- Construction costs are eligible, as long as the business occupies at least 60%-80% of the space upon the project's completion. A contingency reserve for cost overruns of up to 10% of construction cost can be included in the calculation of the total project. Buildout of space not occupied by the business is not eligible
  
• FURNITURE AND FIXTURES- The cost of furniture can be included as long as they are less than 10% of the total project.
  
• MACHINERY AND EQUIPMENT- All costs related to the purchase, dismantling, transportation, or installation of machinery and equipment can be included, as long as the assets have useful life of at least 10 years.
  
• SOFT COSTS- All professional fees directly attributed to the project are eligible. These include: appraisals, environmental studies, title insurance fees, architect fees, engineering fees, electricity, gas and water hook-up charges, and related legal and accounting fees. Additional expenses may apply.
  
• INTERIM FINANCING COSTS- Interest and points on the interim construction loan can be included in the project cost. Any expenses incurred towards the total cost of a project, other than a land purchase, must be made within nine months prior to the date a completed loan application package is received for consideration.

If you have any questions about whether a cost or expenditure may be included or considered under the SBA 504 loan program funding, please contact SomerCor 504, Inc. at 312.360.3300.