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SBA 504

The Small Business Administration offers guaranteed loan programs, one of which is called the SBA 504. This loan provides long-term, fixed-rate financing of up to $5 million for major fixed assets that promote business growth and job creation.

SBA 504 loans are available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.

There are two parts to any SBA 504 loan:

  • The Bank loan
  • The CDC loan

Do I qualify?

Your company must meet the following criteria in order to be qualified for a 504 loan:

  • operate a business for profit in the US or its territories
  • possess a less than $15 million in tangible net worth
  • a two-year period prior to your application with an average net income of less than $5 million after federal income taxes

The SBA size guidelines, possessing competent management competence, a workable business plan, excellent moral character, and the ability to repay the loan are other basic eligibility requirements.

Businesses engaged in passive, speculative, or nonprofit activity are not eligible for loans. Small businesses and lenders are urged to get in touch with a Certified Development Company in their region for more details on eligibility conditions and loan application procedures.

What is a 504 loan used for?

Various items that support business expansion and employment creation can be purchased with a 504 loan. These include investing in or building:

  • existing structures or property
  • updated facilities
  • equipment and machines for the long term
  • As well as the development or modernization of:
  • lands, roads, services, parking areas, and landscaping
  • current facilities

You cannot utilize a 504 loan for:

  • Stocks or working capital
  • Debt consolidation, repayment, or refinancing
  • Real estate speculation or rental property investing

What do I have to submit?

504 loans are only offered by Certified Development Companies (CDCs). Find a CDC in your area first to make sure you are working with a reputable lender.

Then, start putting your 504 loan authorization package together. Use our 504 Authorization File Library to get the paperwork you'll need to apply for your 504 CDC loan.

How can I repaid my 504 loan?

Loan payback terms might vary depending on a number of factors:

Payment conditions – Available maturity terms of 10 and 20 years

Finance charges – Pegged to a percentage point higher than the going market rate for 5-year and 10-year U.S. Treasury securities. Approximately 3% of the debt is covered by this rate, which might be financed by the loan.

Read the articles below to learn more about the Small Business Administration's SBA 504 loan program

  • The Secret to Maximizing Your SBA 504 Loan Proceeds
    The SBA 504 Green program allows for an aggregate of 16.5 million in total SBA loan proceeds, which is typically capped at 5 million. It is a variation of the traditional SBA 504 program, which includes a senior loan and a junior loan, with the latter being the SBA piece. With this program, up to … Read more
  • How Dental Offices Can Benefit from the SBA 504 Loan Program
    In this article, you will learn how dental offices can benefit from the SBA 504 loan program. There has never been a time in history when demand for dentists was stronger than it is today. Consumers are showing a much greater interest in taking care of their teeth, which includes everything from whitening treatments to … Read more
  • What Is the Current Interest Rate for SBA 504 Loans November 2022?
    What Is the Current Interest Rate for SBA 504 Loans (November 2022)? UPDATE: The current interest rate on SBA 504 loans is 6.53 percent on the 25-year, 6.45 percent on the 20-year, and 6.53 percent on the 10-year. If you look back to January 2022, rates have doubled. In fact, rates are near the highs … Read more
  • How SBA 504 Loan Packages Are Structured
    In this article, you will learn how SBA 504 loan packages are structured. It’s quite simple, actually.  The CDC, or Certified Development Company, is going to be in charge of coordinating and arranging the structure of the funding package for the parties involved. Generally speaking, it works like this: The SBA 504 loan is a … Read more
  • Are SBA 504 Loans Hard to Get?
    In this article, we answer the question, “Are SBA 504 Loans Hard to Get?” When it comes to loans for small businesses, funding through the Small Business Administration (SBA) is frequently regarded as the industry standard because the conditions are typically more favorable than those offered by other financing choices.  SBA loans, like those offered … Read more