After forming your new Delaware company, questions may arise as to what needs to be done to accomplish specific goals for your business. Sometimes, clients that form start-up companies are bootstrapped as it pertains to funds. And perhaps you’re looking to grow your business by upgrading a building or repairing streets within your community, but you need to obtain a loan in order to begin this process and need to hire employees. Or, maybe you’re looking to improve other utilities or a piece of land.
While they’re loans that your company can consider, the 504 Loan Program provides long-term, fixed rate financing for major fixed assets that promote business growth and job creation, according to the U.S. Small Business Administration (SBA).
If interested in obtaining a 504 loan, according to the SBA website, your business will be required to have an average net income of less than $5 million after federal income taxes for the two years preceding your application. Other SBA 504 loan requirements also include the following:
*And according to the SBA website, the 504 Loan cannot be made to businesses in nonprofit, passive, or speculative activities. The loan also cannot be used for working capital or inventory, consolidating, repaying or refinancing debt or investment in rental real estate, according to the SBA website.
Next, you may be wondering how SBA 504 loans can be used for your business. The SBA provides a detailed list of how this loan can be beneficial for your business as it can be used for a wide variety of assets such as the following:
The Purchase or Construction of:
The enhancement of land, streets, utilities, and already existing facilities
If your business is looking to obtain the SBA 504 Loan from a lender, the loan can be obtained from a Certified Development Company (CDC). You will need to complete your 504 Loan Authorization Package and click here for instructions from the SBA website. Assisting with obtaining this specific loan is outside our scope of services at Harvard Business Services, Inc. (HBS) as it’s best to consult with a qualified lender directly for guidance.
If looking to start a business, and form a new company, Delaware continues to be the most popular state to form a company in as clients that form a Delaware entity can generally conduct lawful business activities around the world. The corporate law structure that Delaware offers continues to be the strongest in the United States and the world.
If you plan on forming a new Delaware company and obtaining an EIN, or if you have any questions regarding the formation process, we can be reached at 1-302-645-7400 or 1-800-345-2677 ext. 6900 or via email at firstname.lastname@example.org. We can also be reached via skype at delawareinc.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source's content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.