SBA 504 Loans

SBA 504 Loan Rates - Rates updated February 2nd, 2025

Loan Product	Starting Rates	LTV
10, 20, or 25 Year Fixed Rates	6.89%	Up tp 90%	Get Free Quote

 

SBA Loans Overview

SBA (Small Business Administration) loans are some of the best lending options for business owners looking to finance their owner-occupied properties. The SBA is mission driven to provide financing to small business owners. They help small businesses get the funding they need by setting guidelines for loans and reducing lender risk. By partnering with many lenders across the country and guaranteeing loans, the SBA helps to increase financing options for small businesses nationwide. Select Commercial is uniquely qualified to help find the best SBA loan for you and your business.

SBA 504 Loan Program: Affordable Financing with Select Commercial

The SBA 504 loan program provides long-term, fixed-rate financing for businesses looking to acquire major fixed assets such as commercial real estate and heavy equipment. With flexible loan amounts, low down payments, and competitive interest rates, this program is an excellent solution for business owners seeking to expand while preserving cash.

What Is an SBA 504 Loan?

The SBA 504 loan is a government-backed financing option that helps businesses purchase or construct owner-occupied commercial real estate or acquire long-term equipment. Unlike conventional loans, an SBA 504 loan is structured as a partnership between the borrower, a private lender, and a Certified Development Company (CDC) — a nonprofit organization regulated by the SBA that promotes economic development.

How an SBA 504 Loan Works

• A bank or private lender funds 50% of the project cost
• The CDC provides 40% of the financing through the SBA 504 loan
• The borrower contributes at least 10% as a down payment

For example, if a business purchases a $10 million property:

• The bank would finance $5,000,000 as a first mortgage
• The CDC would provide $4,000,000 as a second mortgage
• The borrower would need to bring only $1,000,000 down

This structure allows businesses to secure up to 90% financing, making it one of the most affordable options for commercial real estate or equipment purchases.

SBA 504 Loan Eligibility: Do You Qualify?

To qualify for an SBA 504 loan, your business must:

• Operate as a for-profit company within the United States or its territories
• Have a tangible net worth of less than $15 million
• Generate an average net income under $5 million (after federal taxes) for the two years prior to applying
• Meet SBA size guidelines
• Have qualified management experience and a feasible business plan
• Demonstrate good credit and repayment ability

SBA 504 loans cannot be used by:

• Non-profits
• Speculative businesses
• Passive income real estate investors

What Can an SBA 504 Loan Be Used For?

The SBA 504 loan program is designed to finance major fixed assets that contribute to business growth, including:

• Purchasing owner-occupied commercial real estate (offices, warehouses, manufacturing facilities, etc.)
• Constructing new business properties on purchased land
• Renovating or upgrading existing buildings (roofing, plumbing, electrical systems, energy efficiency improvements)
• Acquiring long-term machinery or heavy equipment (must have a useful life of at least 10 years)
• Refinancing existing debt used to purchase fixed assets (must meet SBA refinancing guidelines)

The SBA 504 loan can also be used to finance the following owner-occupied property types:

• Office
• Retail
• Self-Storage
• Warehouse/Industrial
• Medical
• Special use properties such as hotels, motels, marinas, and restaurants

SBA 504 Loan Benefits: Why Choose Select Commercial?

• Low Down Payment – Only 10% required for most borrowers
• Fixed Interest Rates – Below-market, long-term fixed rates protect against future rate hikes
• Flexible Loan Terms – Choose from 10-, 20-, or 25-year repayment options
• Years of SBA lending experience – Select Commercial specializes in SBA 504 financing, helping businesses secure fast and reliable funding

How to Apply for an SBA 504 Loan with Select Commercial

Start by filling out our Free Quote form, and we will guide you on the next steps to be taken.

SBA 504 Loan FAQs

Who is an SBA 504 loan best suited for?
Businesses looking to purchase commercial real estate, expand facilities, or acquire heavy equipment.

What credit score is required?
Most lenders require a credit score of 680 or higher, but Select Commercial can work with a range of credit profiles.

Get Your SBA 504 Loan with Select Commercial Today

If you're looking for an affordable way to purchase commercial property, equipment, or expand your business, the SBA 504 loan could be the perfect solution. With low down payments, fixed rates, and long repayment terms, this program provides business owners with the capital they need to grow.

📩 Get a Free Quote Now and speak with an SBA loan expert at Select Commercial to explore your financing options today.