SBA 504 Loan Program

Up to 90% financing for fixed asset projects with affordable rates and terms

Purchasing a building or a piece of large equipment is a significant investment for your business and it’s important to find an affordable loan. With the SBA 504 program, you can qualify for a low, fixed interest rate loan with a term of up to 25 years, and put as little as 10% down.

SBA loan programs are well-known for funding start-ups and less established businesses, but the SBA 504 loan program is different. It makes fixed asset purchases very affordable for businesses of all shapes and sizes so that they can invest in themselves and their communities. Learn more about the SBA 504 loan program’s benefits for you, and explore resources, guides, and more information on how to use an SBA 504 loan to reach higher and grow.

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Below-market, fixed interest rates

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Terms up to 25 years

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Low down payment

What is an SBA 504 loan?

The SBA 504 loan program provides long-term, fixed rate financing of up to $5.5 million for major fixed assets, including owner-occupied real estate and heavy equipment. The program can also be used to refinance debt incurred for these types of purchases.

How it works

SBA 504 loans are unique because they are always used together with a bank loan to finance up to 90% of total project costs. Here’s how a typical 504 loan works:

  • A bank funds 50% of project costs with a conventional mortgage
  • Pursuit funds 40% of project costs with a 504 loan
  • You make a 10% down payment on the project

So, for a $1 million project, your bank loan would be $500,000, your loan with Pursuit would be $400,000 and your down payment would be $100,000.

If you’re already working with a bank, we’ll partner with them to blend SBA 504 into your financing plan. If you aren’t, our SBA 504 lenders can help you find a bank that’s familiar with the SBA 504 loan program.

Program details

  • Loan amounts: $50,000 to $5.5 million for the 504 portion of the loan. That means that significantly larger projects can be financed using a 504 loan
  • Terms: 10- 20- and 25-year terms are available
  • 504 loan rates: Below market rate that is fixed for the life of your loan. View current SBA 504 loan rates
  • Time to funding: Your 504 loan will be funded on approximately the same timeline as your first mortgage (bank loan)

Is the SBA 504 loan program right for me?

If you’re looking to fund an owner-occupied commercial real estate or other fixed asset purchase, you may be a candidate for the 504 loan program. Start an SBA 504 loan application online and one of our SBA 504 lenders will schedule a time to speak with you one-on-one to learn more about your project, go over SBA 504 loan requirements, and determine if it’s the right option for you.

What can you use the SBA 504 loan program for?

The SBA 504 loan program is versatile and can be used to fund a variety of fixed-asset expenses. Here’s how you can use a 504 loan:

With the SBA 504 loan program through Pursuit, you’ll find an affordable loan option that can put owner-occupied commercial real estate and other fixed-asset purchases within reach. 

SBA 504 loan program: Frequently Asked Questions (FAQs)

The SBA 504 loan program is good for small business owners looking to fund owner occupied-commercial real estate or other fixed asset purchases. The SBA 504 loan program is designed to help businesses of all shapes and sizes grow and create jobs and opportunity in their communities. Whether you are a start-up or a well-established business, you can take advantage of affordable SBA 504 loan rates and terms.

Your small business must:

  • Be an operating business
  • Be a for-profit business
  • Be located in the United States
  • Have a tangible net worth less than $15 million, and have an average net income, after Federal income taxes, of less than $5 million for the preceding two years
  • Be able to demonstrate a need for the desired credit
  • Must meet SBA size standards
  • The building must be 51% owner-occupied for purchases, 60% for new construction

The SBA 504 loan program provides below-market fixed interest rates for the life of your loan. Interest rates change monthly, so your final interest rate will be set when your SBA 504 loan is fully funded.

One of the most important factors lenders consider when determining business loan interest rates is creditworthiness. Lenders consider your business’s past performance, cash flow and future prospects. They also look at your personal financial history and personal credit score to get a fuller sense of how you manage debt.

Collateral can be another major factor for lenders when determining the interest rate of your SBA 504 loan. SBA 504 loans are secured by commercial real estate and other tangibles, while SmartLoans aren’t necessarily secured by any collateral. That is way SBA 504 rates tend to be lower than other loans. Learn more about how SBA 504 rates are determined here.

What does this mean for you as the borrower? It means that through the SBA 504 program, you secure long-term, fixed-interest rates that are extremely competitive (often at or even below conventional commercial interest rates). When you factor in the longer repayment terms (up to 25 years) and the reduced owner-equity requirement (usually 10% for SBA 504), it’s hard to find a better option anywhere. Learn more about how interest rates are calculated.

Terms of 10-, 20- and 25 years are available. Longer terms make the monthly payment on your loan more affordable.

The timing generally depends on the complexity of the loan request and applicant preparation. Some loans can close within days or weeks of the submission of a complete application. However, commercial real estate transactions generally take 60 to 90 days and sometimes longer if construction is involved.

The more prepared you are for your SBA 504 loan application, the quicker the
process will be!

You can start an application online or call 1-866-466-9232 between 9am and 5pm EST to speak with a representative. For a smooth and efficient SBA 504 loan application process, get prepared with six essential steps.

Learn how other business owners have used this program to fuel their ambition:

The SBA 504 loan program is administered by Pursuit CDC. Pursuit CDC is an ALP Express Lender.

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Get started

Ready to fund your dream? Learn more about our small business SBA 504 loan application process and get started today.

Find the right loan for your business today

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