FAQs

Frequently Asked Questions:

Is my business eligible for a 504 Loan?:
Almost all businesses are eligible for 504 Loans. Businesses that are not eligible include non-profits, businesses engaged in lending, life insurance companies, businesses selling through the pyramid plan (like Avon and Mary Kay), and businesses engaged in gambling services. To see specific size standards and eligibility requirements, please visit the Eligibility page.

How much financing is available?
A company can borrow up to $1 million, or if it meets a public policy goal (minority-owned, woman-owned, veteran-owned, or in a rural area), you can borrow up to $1.3 million. This amount represents only 40% of the project costs, so projects can be larger since the bank is taking on 50% as well. To see the basic structure of the loan, visit the Loan Overview page.

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How do we apply for this loan?
To begin the loan application process, you need to schedule an appointment to come and visit with our staff to discuss the program. Instead of simply handing out applications, we work to make sure you qualify and understand how the 504 Loan Program works before you begin filling out paperwork. If you are interested in applying for a 504 Loan, please visit the Request Information page or the Contact Us page.

What is the purpose of the 504 Loan Program:
The Loan Program is an economic development tool used in conjunction with area lenders to give a low interest, long term loan. Both the borrowers and the lenders benefit from the 504 Program. For more information about the purpose of this loan program, visit the Project Structure page.

How can I use the 504 Loan Program?
A 504 loan can be used for building expansion, in the form of land acquisition and the construction of a new building. Building renovations and to some extent, equipment purchases, can also be financed through the 504 Loan Program. Visit the Eligibility page to find more information regarding loan usages.

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How does the 504 Loan Program work?
After the borrower receives lender approval, we put together a loan package. The first step is to schedule an appointment to visit with our staff. Please visit the Request Information page or the Contact Us page if you are interested in the 504 Loan Program.

What are the terms, fees, and interest rates on a 504 Loan? Visit the Terms page to view terms and rates of the program; please visit the Fees page for a listing of specific fees.

What are the benefits of a 504 Loan?
Benefits of the 504 Loan Program include a fixed interest rate, long maturity, low down payment, and lower lender risk. Since 1980, the 504 Loan Program nation-wide has provided 40,000 loans, totaling over $20 billion and the creation or retention of over 1 million jobs. If you are a potential or current borrower, please visit Borrower Advantages page. If you are a potential or current lender, please visit the Lender Advantages page.

What is a Certified Development Company (CDC)?
A Certified Development Company is an organization that is licensed and regulated by SBA to administer the 504 Loan Program. Most CDC's are non-profits and all have the purpose of economic development. Caprock began as a CDC in 1982. For more about Caprock, please visit the History page.

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What is the time frame of 504 Loan process?
Once the borrower provides the required information, it takes approximately 45 days to complete the application and receive approval from SBA. Once approved by SBA, typically the bank will fund an interim loan so that the borrower may purchase property, finance improvements, or begin construction.

Is there a certain bank I have to work with? Do you recommend particular banks to work with?
Caprock has worked with many banks from throughout the South Plains area. The borrower can choose any bank or a non-bank that is regulated by a state or federal regulatory body (such as a credit union or production credit association) to work in conjunction with Caprock to finance a 504 Loan.

Does Caprock finance inventory and working capital?
Caprock does not finance inventory or working capital. The 504 Loan is specifically for building (construction, acquisition, or improvements), equipment with a long useful life of at least 10 years, and contingencies. SBA's 7A Program can be used for inventory and used in conjunction with a 504 Loan. Visit the Eligibility page for specifics on eligibility requirements. For information regarding the 7A Loan Program, please contact us via the Request Information page or our contact detials provided on the Contact Us page.