SBA 504 Loans
Long-term financing generally associated with owner-occupied commercial real estate and major fixed assets.
Program overview
The SBA 504 program supports long-term, fixed-asset financing, commonly structured with a participating lender, a Certified Development Company, and a borrower contribution.
How it works
- A participating lender typically finances a portion of the project.
- A Certified Development Company finances a portion under the SBA 504 structure.
- The borrower contributes a down payment, which varies by project and applicant profile.
- Program rules, project eligibility, and terms are determined by the participants and applicable requirements.
Common uses
- Purchasing owner-occupied commercial real estate
- Construction or major renovation of an owner-occupied facility
- Long-life machinery and equipment
Who may be a good fit
- Businesses buying a building they will occupy
- Businesses investing in long-life equipment
What you may need
- Business bank statements
- Business tax returns
- Personal tax returns
- Year-to-date profit and loss statement
- Balance sheet
- Business debt schedule
- Government-issued identification
- Business formation documents
- Purchase agreement or project cost detail
- Property information or appraisal ordered by the lender
Potential advantages
- Long repayment terms on fixed assets
- Designed for large capital projects
- Fixed-asset focus can preserve working capital
Potential drawbacks
- Not intended for general working capital
- Multi-party structure can extend timelines
- Project eligibility rules are specific
Application process
- Define the project and estimated costs
- Speak with a participating lender and a Certified Development Company
- Assemble financial and project documentation
- Underwriting and approvals
- Closing and funding
General qualification considerations
- Project must generally involve eligible fixed assets
- Owner-occupancy requirements may apply to real estate projects
- Ability to repay and business operating history
- Applicable SBA size standards
- Borrower equity contribution
Alternatives to consider
Frequently asked questions
Can SBA 504 be used for working capital?
The 504 program is generally focused on fixed assets such as owner-occupied real estate and long-life equipment rather than general working capital.
How much down payment is required?
Borrower contribution varies by project type, business history, and program requirements. The participating lender and Certified Development Company determine the structure.
This is preliminary information, not an eligibility determination, offer, or approval. Final eligibility, terms, rates and approval are determined by the applicable financing provider.