Finance
Indiana's Small Business Administration (SBA) 504 loan program can be used by Indiana business owners to finance:
AResidential rental properties only
BCommercial real estate purchases and major equipment for small businesses at favorable long-term, fixed interest rates✓ Correct
CAgricultural land only
DOnly renovations to existing buildings
Explanation
SBA 504 loans provide long-term, fixed-rate financing for major fixed assets — including commercial real estate and equipment — for eligible small businesses. They require owner-occupancy and are often used to purchase or improve commercial property.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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