SBA Loans > SBA 504 Loans

SBA 504 Loans for Commercial Real Estate and Equipment

Secure long-term, fixed-rate financing to purchase, construct, or improve owner-occupied commercial real estate and acquire qualifying major equipment.

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SBALoansFor.com is not a government agency or direct lender. Participating lenders and Certified Development Companies provide financing.

Flexible Uses
Multiple business purposes

Longer Terms
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Up to
$5 Million
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What Is an SBA 504 Loan?

The SBA 504 loan program provides long-term financing for major fixed assets that support business growth and job creation. Established small businesses often use these loans to buy commercial property, build a new facility, renovate an existing building, or acquire long-term machinery and equipment.

SBA 504 financing is arranged through a Certified Development Company in cooperation with a participating lender. The maximum SBA-backed portion may reach $5.5 million for qualifying projects. Total project financing may be higher depending on the transaction, lender, and borrower.

SBA 504 Loan Overview
Financing Amount	Based on the qualifying project, with an SBA-backed portion of up to $5.5 million
Primary Uses	Commercial real estate, construction, renovations and major equipment
Repayment Terms	Available 10-, 20- and 25-year maturities
Rate Structure	Long-term, fixed-rate financing on the SBA-backed portion
Application Process	Coordinated through a Certified Development Company and participating lender
Best Suited For	Established businesses investing in owner-occupied facilities or long-term fixed assets

What Can SBA 504 Financing Be Used For?

Purchase Commercial Real Estate

Finance the acquisition of an office, warehouse, manufacturing facility, medical building, retail property or another qualifying owner-occupied business location.

Construct a New Facility

Purchase land and finance the construction of a new facility designed to support your company’s operations and long-term growth.

Renovate or Improve a Property

Make qualifying improvements, modernize an existing building or convert a property for your business operations.

Purchase Major Equipment

Acquire long-term machinery and equipment with a useful remaining life that meets SBA program requirements.

Expand an Existing Facility

Add space, increase production capacity or improve a property to accommodate a growing workforce and expanding operations.

Refinance Qualifying Debt

Certain eligible debt associated with fixed assets may qualify for refinancing when the transaction meets SBA requirements.

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What SBA 504 Loans Cannot Be Used For

SBA 504 loans are designed primarily for major fixed assets. They generally cannot be used for:

Working capital
Purchasing inventory
Short-term business expenses
Speculative investments
Passive investment properties
Rental real estate that the borrower will not primarily occupy
Refinancing debt that does not meet SBA requirements

Businesses that need financing for working capital, inventory or a broader combination of business purposes may want to explore an SBA 7(a) loan instead.

Benefits of SBA 504 Loans

Long-Term Financing

Extended repayment periods may make major real estate and equipment investments more manageable for growing businesses.

Fixed Interest Rate

The SBA-backed portion of a 504 loan generally has a fixed rate, providing greater predictability for long-term financial planning.

Preserve Working Capital

Financing a major fixed-asset purchase may let your business keep more cash for payroll, inventory, marketing, and daily operations.

Finance Large Projects

The program can support substantial investments in commercial property, construction, renovations, and major equipment.

Build Business Equity

Purchasing an owner-occupied property can help a business build equity instead of continuing to lease its operating location.

Support Long-Term Growth

A new facility, additional space, or upgraded equipment may help a company increase capacity, improve efficiency, and pursue new opportunities.

SBA 504 Loan Requirements

Although requirements vary by project and lender, an applicant generally must:

Operate an eligible for-profit business
Conduct business in the United States
Meet applicable SBA size standards
Demonstrate qualified management experience
Present a feasible business plan or project
Show sufficient cash flow and the ability to repay
Have an acceptable credit and financial history
Use the financed property primarily for eligible business operations
Provide a borrower contribution when required
Meet applicable job-creation or public-policy objectives

Participating lenders and Certified Development Companies evaluate every transaction individually. Additional collateral, guarantees and documentation may be required.

How SBA 504 Financing Is Structured

A typical SBA 504 project involves financing from three sources:

A participating lender provides a senior loan for part of the project.
A Certified Development Company provides an SBA-backed loan for another portion.
The borrower contributes equity toward the project.

The exact structure and borrower contribution depend on factors such as the project, property, business history, industry and lender requirements. Startups and special-purpose properties may require a larger contribution.

Financing Designed Around Your Business Goals

Loans Up to
$5 Million

Flexible
Business Uses

Participating
SBA Lenders

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A Simple Path to SBA Financing

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Properties That May Qualify for SBA 504 Financing

SBA 504 financing may be available for many types of owner-occupied commercial properties, including:

Office buildings

Medical and dental offices

Manufacturing facilities

Warehouses

Distribution centers

Hotels and motels

Restaurants

Automotive facilities

Childcare centers

Veterinary clinics

Retail buildings

Industrial properties

The property must satisfy SBA occupancy and eligibility requirements. SBA 504 financing is not intended for passive real estate investments.

Frequently Asked Questions About SBA 504 Loans

How much can I borrow with an SBA 504 loan?

The SBA-backed portion of a 504 loan may reach $5.5 million for qualifying projects. Because SBA 504 financing also includes a senior lender’s portion and a borrower contribution, the total project amount may exceed the SBA-backed portion. Available financing depends on the project, business and participating financing providers.

Can an SBA 504 loan be used to purchase commercial real estate?

Yes. Purchasing owner-occupied commercial real estate is one of the primary uses of SBA 504 financing. The borrower must satisfy the program’s occupancy and eligibility requirements.

Can I use an SBA 504 loan for construction or renovations?

SBA 504 funds may be used to purchase land, construct a qualifying business facility, renovate an existing property or make eligible improvements to an owner-occupied location.

Can SBA 504 financing be used for equipment?

Yes. The program may finance qualifying long-term machinery and equipment. The equipment must meet SBA useful-life and eligibility requirements.

How much of a down payment is required?

The required borrower contribution depends on the project, lender, business history and property type. Established businesses purchasing standard-use properties may qualify for a lower contribution than startups or businesses acquiring special-purpose properties.

How long are SBA 504 loan terms?

Available maturities include 10, 20 and 25 years. The applicable term depends primarily on whether the financing is being used for equipment, real estate or another qualifying fixed asset.

Explore SBA 504 Loan Options

Whether you are purchasing an existing commercial property, constructing a new facility, renovating your current location or investing in major equipment, SBA 504 financing may provide the long-term structure needed to complete your project.

Complete a simple online application to begin exploring available financing options. Loan availability, amounts, rates, fees, repayment terms and eligibility requirements vary by lender, Certified Development Company, project and applicant. Submitting an application does not guarantee approval or funding.

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SBA 504 Loans for Businesses Across the U.S.

SBALoansFor.com helps business owners across the United States explore SBA 504 financing to purchase, construct, or improve owner-occupied commercial real estate and acquire qualifying major equipment. Whether you operate a construction company, restaurant, medical practice, manufacturing business, or another eligible small business, we can help you explore SBA 504 loan options based on your project, business qualifications, and long-term financing goals.

Important Financing Disclosure

SBALoansFor.com is not a bank, direct lender, government agency, or the U.S. Small Business Administration. Independent third-party lenders and financing providers provide financing. Available programs, loan amounts, interest rates, fees, repayment terms, eligibility requirements and approval criteria vary by provider and applicant. Submitting an application does not guarantee approval or funding.