What are eligible passive concerns?
Potential tax benefits can result.Ownership by an Eligible Passive Concern (EPC) is permitted for 504 loans. The EPC, a ‘passive’ small entity or trust can be the borrower and own the project assets included in a loan application. This situation is typical for most of the loans processed by BEFCOR.The EPC must lease the real or personal property financed using 504 loan proceeds to an operating small business which is substantially owned by the same individuals who own the EPC.The EPC will show the interest paid on the 504 project and the accrued depreciation on the EPC’s tax documents.
