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ACESBA

Long-term, fixed-rate financing for property and major equipment

SBA 504 Loan

An SBA 504 loan finances owner-occupied real estate and long-life equipment in three parts: a bank loan for at least 50% of the project, a fixed-rate loan from a Certified Development Company (CDC) for up to 40%, and at least 10% from the business owner.

Updated October 2026 for SOP 50 10 8.1, effective October 1, 2026.

Maximum
Up to $5 million for the SBA-backed (CDC) portion; up to $5.5 million per project for small manufacturers and energy projects
Terms
10, 20 or 25 years
Rates
Fixed, set at an increment above the 10-year U.S. Treasury rate. Fees are about 3% and can be financed.
SBA guarantee
SBA backs the CDC portion of the project
Collateral
The property or equipment being financed
How to apply
Through a Certified Development Company (CDC) working with a bank.

Checked against sba.gov, October 2026. Lenders set their own terms within SBA limits.

Good for

  • Buying, building or renovating owner-occupied buildings or land
  • Machinery and equipment with at least 10 years of useful life
  • Refinancing qualifying fixed-asset debt

Not for

  • Working capital or inventory
  • Rental or speculative real estate
  • General debt consolidation

Who qualifies

  • An operating, for-profit business located in the United States
  • Small under SBA size standards for your industry
  • Not an ineligible business type (for example lending, passive real estate, gambling)
  • Every owner and required guarantor a U.S. citizen or U.S. national living in the U.S. (SOP 50 10 8.1)
  • No delinquent federal debt, such as a past-due SBA or student loan
  • Unable to get the same credit on reasonable terms without SBA help
  • Able to show the business can repay the loan
  • The business must occupy the property it finances (owner-occupied)
  • Qualified management, a feasible plan and the ability to repay
  • Not engaged in nonprofit, passive or speculative activities
  • A cash injection from the owner, typically at least 10% of the project, and more for new businesses or special-purpose buildings

What to prepare

  • Project budget: purchase price, construction or renovation costs, fees
  • Purchase contract, construction bids or equipment quotes
  • Tax returns and financial statements
  • Projections showing the business can cover the new payments
  • SBA Form 1244, completed with your CDC

Your lender may ask for more. The Lender Document Checklist covers every program in detail.

SBA 504 Loan: common questions

How much is the down payment on an SBA 504 loan?
At least 10% of the project. It rises to 15% for a new business (operating two years or less) or a limited or special-purpose property, and to 20% if both apply (SOP 50 10 8.1, Section C, Ch. 1; 13 CFR 120.910).
What is the maximum SBA 504 loan?
The CDC (debenture) portion can be up to $5 million for a business and its affiliates, or up to $5.5 million per project for small manufacturers and eligible energy projects. SBA does not cap the bank portion, so total projects can be larger (SOP 50 10 8.1, Section C, Ch. 1).
What are the owner-occupancy rules for a 504 loan?
The business must occupy at least 51% of an existing building, or at least 60% of new construction. It can lease the rest to others (SOP 50 10 8.1).
Can a startup get an SBA 504 loan?
Yes. A new business can use 504, but it contributes at least 15% of the project (20% if the property is special-purpose), and the bank loan must cover at least 50% of project costs.
Can a 504 loan be used for land?
Yes, as part of an owner-occupied project: land and land improvements, buildings, construction and renovation, and machinery with at least 10 years of useful life are eligible costs. Working capital and inventory are not.
Does a 504 loan have a jobs requirement?
Yes. The project must create or retain one job for every $95,000 SBA guarantees ($150,000 for small manufacturers and energy projects), or meet a community development or public policy goal (SOP 50 10 8.1, Section C, Ch. 1).
How long are 504 loan terms?
The CDC portion runs 10, 20 or 25 years at a fixed rate: up to 25 years for real estate and at least 10 years for machinery and equipment.