Estimate your SBA 504 loan structure — see the three-part split (borrower, CDC, bank), monthly payments for each portion, and total project financing.
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The most powerful financing tool for owner-occupied commercial real estate.
SBA 504 splits your project into three parts: you put 10% down, a CDC (Certified Development Company) provides 40% via an SBA-backed debenture at a fixed rate, and a bank covers the remaining 50% as a conventional first lien. This structure gives you 90% financing at a blended rate below market.
You must be a for-profit business, operate in the US, have tangible net worth under $15M, and occupy 51%+ of the building. The property must be owner-occupied — pure investment properties don't qualify. Credit score 680+ is typical, and you need demonstrated ability to repay from business cash flow.
SBA 504 covers land and building purchase, new construction, renovations, machinery and equipment (10-year CDC term), professional fees, and certain soft costs. It does NOT cover working capital, inventory, or debt consolidation. The SBA portion maxes at $5M ($5.5M for manufacturing and energy).
Only 10% down vs. 25–30% conventional. The CDC portion is fixed for 20–25 years (no rate risk). Below-market blended rate saves thousands annually. No balloon payment on the CDC portion. And SBA guarantee means lenders are more willing to approve borderline deals.
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Common questions about SBA 504 financing.
The standard minimum down payment is 10% of the total project cost. Startups (less than 2 years in business) or special-use properties (e.g., single-purpose buildings) may require 15–20% down. The low down payment is one of the biggest advantages of SBA 504 over conventional financing.
SBA 504 CDC debenture rates are set monthly and pegged to 5-year and 10-year Treasury rates plus a spread. With the 10-year Treasury at 5.18% (September 2026), the CDC rate with fees runs about 6.25–7.25%. The key advantage is that this rate is FIXED for the entire 20–25 year term, providing payment stability.
No. SBA 504 requires the borrower to occupy at least 51% of the building (60% for new construction). It is designed for owner-occupied commercial real estate. For investment properties, consider DSCR loans, conventional CRE mortgages, or bridge financing instead.
The SBA/CDC portion (the 40% piece) maxes out at $5 million for standard projects and $5.5 million for manufacturing and energy projects. However, the total project cost can be higher — the bank first-lien portion has no SBA cap. Projects over $15–20M are common.
SBA 504 loans typically take 60–90 days from application to closing. The process involves bank approval for the first lien, CDC application and SBA authorization, and debenture funding. BestLoanUSA advisors help prepare your package to minimize delays.
It depends on the bank. Many banks offer 10-year terms with 25-year amortization (balloon at year 10). Some offer fully amortizing 20–25 year terms. The CDC portion never has a balloon — it is fully amortizing over 20 or 25 years. Our advisors negotiate the best bank terms available.
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