How would a 504 loan work for a business that wants to buy land and build on it later, like in the spring due to weather issues? And with weather being unpredictable, how long does SBA allow for construction?

Barbara Gill, Evergreen's Senior Loan Officer for Alaska:

I get asked this a lot. The good news is that the SBA Authorization is good for up to 48 months! Evergreen works with lenders to secure all approvals based on what the total project is projected to be. An appraisal is ordered by the lender based on an "as built" value. With the SBA approvals in hand, the lender then closes the interim loan and ownership of the land is transferred to the borrower.

Construction can begin when the season turns. The lender makes draws on their loan as per their internal policies and procedures, until the construction is done and the loan is fully funded. During this time, the borrower typically pays the lender monthly interest payments, based on the amount that has been drawn down on the loan. Once the project is complete, the appraiser signs off, stating that the work was completed within the scope of the appraisal, the lender notifies Evergreen that the project is done and the loan is fully funded. Evergreen requests any needed updates from the borrower and, as long as no adverse conditions have developed since approval, Evergreen closes the loan with the borrower. The debenture bond sale then occurs, the borrower's SBA rate is set, the funds come in to pay off the SBA portion of the lender's interim loan, and the borrower has two permanent loans with principal and interest payments from there. The construction period can take six months, a year, or even longer.