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SBA 504 Loans
Below-market fixed rates for commercial real estate and heavy equipment
SBA 504 loans provide long-term, fixed-rate financing for major fixed assets like commercial real estate and heavy equipment. The loan is split between a bank (50%), a Certified Development Company (40%), and your down payment (10%), resulting in below-market rates on the CDC portion.
Find SBA 504 Lenders →Loan Range
$125K – $17M
Typical Rate
Below market (CDC portion ~5-6%)
Down Payment
10%
Term
10-25 years
Closing Time
45-90 days
🎯 Best For
- • Owner-occupied commercial real estate
- • Heavy equipment purchase
- • Business expansion
- • New construction
✅ Advantages
- ✓ Only 10% down payment
- ✓ Below-market fixed rate on CDC portion
- ✓ Long terms (20-25 years for RE)
- ✓ No balloon payments
⚠️ Considerations
- • Must be owner-occupied (51%+ for existing, 60%+ for new construction)
- • Cannot be used for working capital
- • Longer closing timeline
- • Two closings (bank + CDC)
SBA 504 Loan Requirements
- ✓ For-profit business
- ✓ Net worth under $15M
- ✓ Average net income under $5M (after taxes) for prior 2 years
- ✓ 51%+ owner occupancy
- ✓ Create or retain jobs (1 per $90,000 CDC)
SBA 504 Loans FAQ
What is a Certified Development Company (CDC)? ▼
CDCs are SBA-certified nonprofit organizations that partner with banks to provide the 504 loan. They handle the SBA-backed 40% portion of the financing.
Can I use SBA 504 for a rental property? ▼
No. SBA 504 requires 51%+ owner occupancy for existing buildings. It's designed for businesses that will operate from the property.
How is the SBA 504 loan structured? ▼
50% from a bank or lender (first lien), 40% from a CDC backed by SBA (second lien), and 10% from the borrower as down payment.
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