SBA 504 Loans
Own Your Building With 10% Down
Long-term, fixed-rate SBA financing for owner-occupied commercial real estate and heavy equipment, with terms up to 25 years.
What is an SBA 504 loan?
An SBA 504 loan is long-term, fixed-rate financing for buying, building or renovating owner-occupied commercial real estate and buying heavy equipment. A bank lends about 50% of the project, a Certified Development Company (CDC) lends up to 40% backed by the SBA, and the business puts down as little as 10%. Terms run 10, 20 or 25 years.
Program limits are set by the SBA and subject to lender and CDC approval. Updated .
How a 504 project is split
- Bank: first mortgage, about 50% of the project
- CDC: SBA-backed second loan, up to 40%, fixed rate
- You: as little as 10% down
What SBA 504 Loans Fund
Buy commercial property
Purchase the building your business operates from, including land and improvements.
Build or renovate
Ground-up construction, expansions and major renovations of owner-occupied space.
Heavy equipment
Long-life machinery and equipment with a useful life of 10 years or more.
SBA 504 Loan Terms
- Down payment
- As little as 10% (15–20% for new businesses or special-purpose property)
- SBA (CDC) portion
- Up to $5 million; $5.5 million for small manufacturers and energy projects
- Total project size
- Can exceed the SBA limit, since the bank first mortgage has no SBA cap
- Terms
- 10, 20 or 25 years; the CDC portion carries a fixed rate
- Occupancy
- Business must occupy at least 51% of an existing building or 60% of new construction
- Business size
- For-profit, tangible net worth under $20 million and average net income under $6.5 million (prior 2 years)
SBA 504 vs. SBA 7(a)
Buying your building? 504 usually wins. Need working capital or to buy a business? Look at SBA 7(a).
| SBA 504 | SBA 7(a) | |
|---|---|---|
| Best for | Owner-occupied real estate and heavy equipment | Working capital, acquisitions, partner buyouts, real estate |
| Down payment | As little as 10% | Typically 10% or more |
| Rate | Fixed on the CDC portion | Usually variable (Prime-based) |
| Maximum term | 25 years | 25 years for real estate, 10 years otherwise |
| Working capital | Not allowed | Allowed |
| SBA limit | $5M CDC portion ($5.5M manufacturing) | $5M loan |
See if Your Project Qualifies
Tell us about the property or equipment and a funding specialist will walk you through the 504 structure, down payment and timeline.
- Owner-occupied commercial property or heavy equipment
- Business operating at least 2 years preferred
- Prefer to talk? Call (888) 562-1119
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Highest approval odds for 2026. Minimal friction.
SBA 504 Loan FAQ
What is an SBA 504 loan?
An SBA 504 loan is long-term, fixed-rate financing for buying, building or renovating owner-occupied commercial real estate and buying heavy equipment. A bank lends about 50% of the project, a Certified Development Company (CDC) lends up to 40% backed by the SBA, and the business puts down as little as 10%. Terms run 10, 20 or 25 years.
How much do I need to put down on an SBA 504 loan?
Most SBA 504 projects need 10% down. New businesses (under two years) or special-purpose properties such as hotels or gas stations need 15%, and a new business buying a special-purpose property needs 20%.
What is the difference between SBA 504 and SBA 7(a)?
SBA 504 is built for owner-occupied commercial real estate and heavy equipment, with a fixed rate on the SBA portion and as little as 10% down. SBA 7(a) is more flexible: it can fund working capital, business acquisitions and partner buyouts, but its rate is usually variable.
Can I use an SBA 504 loan for working capital?
No. SBA 504 proceeds must go to fixed assets: real estate, construction, renovation or long-life equipment. For working capital, an SBA 7(a) loan, a term loan or a merchant cash advance is the better fit.
Do I have to occupy the property?
Yes. Your business must occupy at least 51% of an existing building, or 60% of a newly built one. Investment property you rent out to others does not qualify; for that, see our real estate investor loans.
How long does an SBA 504 loan take?
SBA 504 loans take longer than private financing because a bank, a Certified Development Company and the SBA all approve the deal. Plan on several weeks to a few months from application to closing.
Buying investment property instead? See real estate-based financing.