SBA 504 Loan Program

What is it for?

The SBA 504 Loan Program is designed to give small businesses access to financing to purchase fixed assets, typically commercial real estate and machinery.

Purchases could include:

  • Existing buildings
  • Land and land improvements
  • Construction of new facilities or renovation of existing facilities
  • Long-term machinery
  • Soft costs related to the project


In order to qualify for a 504 Loan, your business must have an average net income less than $5 million after federal income taxes for the two years preceding the application. Also, your business must have a tangible net worth of less than $15 million.

Loan Structure

The typical structure of a 504 Loan is the borrower contributes 10% of the total project costs, the SBA contributes 40%, and another regulated lender provides the remaining 50%. These loans are long term, usually 20 years, and fixed rate.