SBA 504 Loans

Details
Eligibility
FAQs

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SBA 504 Loan Details

Loans ranging from $300,000 to $5 million
Lower down payments
Longer repayment terms
Financing for fixed asset

Eligibility Criteria for SBA 504 Loans

Small Business Size

Must meet the SBA small business definition, which varies by industry, typically based on revenue or employee count.

For-Profit Business

SBA 504 loans are available only to for-profit businesses operating in the U.S.

Tangible Net Worth and Income

Tangible net worth should not exceed $15 million, and average net income over the last two years should not exceed $5 million.

Use of Funds

Funds must be used for fixed assets like commercial real estate, machinery, equipment, or construction projects.

Owner's Equity

Owners must typically contribute at least 10% equity into the total project cost.

Ability to Repay

Business must show it can repay the loan through historical and projected cash flow.

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Flexible Funding to Fuel Your Business Growth

1. Compare SBA loans to ensure SBA 504 is right for you.

2. Get started by clicking the link below and connecting with an expert to start your application.

3. Receive funds after your application is approved and begin funding your next business project!

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Frequently Asked Questions

What is the difference between SBA 504 and SBA 7(a) loans?

SBA 7(a) loans are more versatile and often used for working capital, business acquisitions, equipment purchases, and more.
SBA 504 loans are primarily used for purchasing real estate or long-term assets.

What can I use an SBA 504 loan for?

SBA 504 loans are for purchasing commercial real estate, long-term machinery and equipment, or funding construction projects for fixed assets.

What is the down payment requirement for an SBA 504 loan?

A down payment of at least 10% of the total project cost is required, potentially higher for startups or businesses with specific criteria.

How does the SBA 504 loan process work, and how long does it take to get approved?

The process involves a CDC and a private lender, typically taking several weeks to a few months for approval.

What interest rates can I expect for an SBA 504 loan?

SBA 504 loan rates are usually lower and fixed for the loan's life, depending on market conditions at funding.

Are startups eligible for SBA 504 loans?

Yes, if they meet specific criteria and can provide the required down payment.

Can I refinance existing debt with an SBA 504 loan?

Yes, refinancing existing debt is possible under certain conditions, such as expanding the business or improving cash flow.

Can I use an SBA 504 loan to fund working capital or other general business expenses?

No, SBA 504 loans are specifically for financing fixed assets, not working capital or general business expenses.

Is collateral required for an SBA 504 loan?

Yes, collateral is typically required.

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