SBA Form 770: What You Need to Know
SBA form 770 is a Financial Statement of Debtor. It can be downloaded from the SBA here. You will need to download and complete this form when applying for a 504 loan, as well as for other SBA loans, such as the 7(a) loan. According to the SBA, "The primary purpose of collecting this information is to evaluate the debtor's financial capacity to repay the debt owed to the Agency and determine to what extent the Agency may compromise the debt, maximize recovery, and protect the interests of the Agency."
Think of it as a financial statement in which you list out your financial situation, financial assets that might be used as collateral for the loan, and other pertinent information. SBA form 770 helps SBA loan officers determine if you are a good fit for the loan, if you will be able to repay the loan, and what recourse they might have should you default on the loan.
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What is the purpose of SBA Form 770?
The primary purpose of SBA Form 770 is to evaluate the debtor's financial capacity to repay the debt owed to the Agency and determine to what extent the Agency may compromise the debt, maximize recovery, and protect the interests of the Agency. You can download this form here.
What information is required to complete SBA Form 770?
SBA Form 770 requires you to provide information about your financial situation, financial assets that might be used as collateral for the loan, and other pertinent information. This form helps SBA loan officers determine if you are a good fit for the loan, if you will be able to repay the loan, and what recourse they might have should you default on the loan. You can download the form here.
How does SBA Form 770 affect the 504 loan process?
SBA Form 770 is required when applying for a 504 loan, as well as for other SBA loans, such as the 7(a) loan. According to the SBA, "The primary purpose of collecting this information is to evaluate the debtor's financial capacity to repay the debt owed to the Agency and determine to what extent the Agency may compromise the debt, maximize recovery, and protect the interests of the Agency." Think of it as a financial statement in which you list out your financial situation, financial assets that might be used as collateral for the loan, and other pertinent information. SBA form 770 helps SBA loan officers determine if you are a good fit for the loan, if you will be able to repay the loan, and what recourse they might have should you default on the loan.
For more information, please visit https://www.sba.gov/document/sba-form-770-financial-statement-debtor.
What are the benefits of an SBA 504 loan?
The SBA 504 loan program offers several benefits to businesses, including long-term, fixed-rate financing, lower interest rates and down payment requirements than SBA 7(a) loans and Express loans, and the ability to purchase fixed assets such as real estate and equipment. The loan is also backed by the SBA, reducing risk for lenders who put up half the cost of the project. In the case of default, the private lender has first lien on project assets. Terms for SBA 504 financing are typically 10, 15, or 20 years, and the loan is fully amortized without a balloon payment.
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What are the eligibility requirements for an SBA 504 loan?
In order to take out an SBA 504 loan, your business must meet the following eligibility requirements:
- Your business must be a for-profit organization.
- Your business must meet current SBA size standards.
- Your business must have a tangible net worth under $20 million.
- Your business cannot earn 1/3 or more of its income from packaging SBA loans.
- Your business must have an average net income under $6.5 million after federal income taxes for the two years preceding your application.
- Your business cannot be engaged in any sort of passive or speculative activities.
Note that additional requirements may be placed by CDCs or conventional lenders. You can find a full list of eligibility requirements and other important information with the SBA here.
SBA 504 LoanSBA 504 LoansSBA Form 770