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Wells Fargo® SBA 504 Term Loan — Frequently Asked Questions

Application Questions

Account Pricing Questions

Account Usage Questions


Application Questions

1. How do I apply for a SBA 504 loan?
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2. Do I need to be a Wells Fargo customer to apply for a SBA 504 loan?
No, you do not need to be a Wells Fargo customer to apply for a SBA 504 loan.Back to Top
3. How do I know if my business is eligible for a SBA 504 loan?
Most businesses are eligible. Your business must:
  • Be for-profit;
  • Be engaged in, or propose to do, business in the United States;
  • Have reasonable owner equity to invest;
  • Use alternative financial resources first, including personal assets.

To be eligible for the 504 loan program a business cannot have a tangible net worth that exceeds $15 million and an average net income of greater than $5 million over the past two years.

Some exceptions do apply.Back to Top
4. How does the financing work?
Wells Fargo will provide 50% of the financing for your SBA 504 loan. The SBA will provide 40% of the 504 loan. You are responsible for a 10% injection of funds.Back to Top
5. Is collateral required for a SBA 504 loan?
Yes, Wells Fargo will hold the first mortgage on real estate and/or secured interest in equipment and machinery. The SBA will hold a second mortgage on real estate, or secured interest in equipment and machinery.Back to Top
6. What happens after I apply?
The loan application will go to a specialized credit team to determine if you qualify under Wells Fargo credit standards, as well as, SBA eligibility guidelines.Back to Top
7. How quickly can I get my SBA 504 loan?
It depends on the use of loan proceeds. Wells Fargo will process your application as quickly as possible.Back to Top

Account Pricing Questions

8. What are the fees associated with this loan?
  • The bank fees will include an origination fee. For real estate loans there may be fees for an appraisal, environmental reviews and filing fees.
  • Generally a 3.5% of the SBA debenture amount is due, although this fee may be financed in the loan.
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9. What will be the interest rate (APR) on my account?
  • You can choose between a fixed and variable rate on the Wells Fargo portion of the loan.
  • For the SBA portion of the loan, you will have a below market fixed interest payment. The actual loan rate will be set when the debenture is sold.
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10. What is my minimum payment?
Your minimum payment for a term loan will be principal and the interest accrued in a given month of activity plus any past due amount.Back to Top

Account Usage Questions

11. How can I use my SBA 504 loan?
The proceeds of a SBA 504 loan can be used for buying real estate, leasehold improvements or for the construction, renovation of a building; and/or for buying machinery and equipment.Back to Top