The SBA requires that the permanent term loan provided by the bank in participation with a 504 debenture, must fulfill the following conditions: Interest Rate: must be fair and reasonable.

• Loan term
  

  a minimum of 10 years if requesting a 20 year term 504 loan or if the project involves real estate.
  

a minimum of 7 years if requesting a 10 year term 504 loan

• The bank's note and lien instruments must not allow future advance clauses except advances for the reasonable costs of collection, maintenance, and protection of the bank's lien(s).
• The Bank's senior loan cannot be cross-collateralized with other financing provided by the bank.