Eligible Project costs for 504 loans.

CFR · 2024-01-01 · US · Title 13

Eligible Project costs which may be paid with the proceeds of 504 loans are: (a) Costs directly attributable to the Project including expenditures incurred by the Borrower (with its own funds or from a loan) to acquire land used in the Project, or for any other expense directly attributable to the Project, prior to applying to SBA for the 504 loan; (b) In Projects involving construction, a contingency reserve for cost overruns not to exceed 10 percent of construction cost; (c) Professional fees directly attributable and essential to the Project, such as title insurance, opinion of title, architectural and engineering costs, appraisals, environmental studies, and legal fees related to zoning, permits, or platting; and (d) Repayment of interim financing including points, fees and interest. (e) If the project involves expansion of a small business concern, any amount of existing indebtedness that does not exceed 100 percent of the project cost of the expansion may be refinanced and added to the expansion cost if: (1) Substantially all (85% or more) of the proceeds of the indebtedness were used to acquire land, including a building situated thereon, to construct a building thereon, or to purchase equipment. The assets acquired must be eligible for financing under the 504 loan program. If the acquisition, construction or purchase of the asset was originally financed through a commercial loan that would have satisfied the “substantially all” requirement and that was subsequently re

official document · source cfr-2024 · id 13:§ 120.882