The SBA 504 Loan Program provides long-term, fixed-rate financing for eligible major fixed assets that support business growth, expansion, and job creation.
Maximum Loan Amount
The SBA-backed portion of a 504 financing transaction is generally available up to $5 million, with higher limits of up to $5.5 million for certain qualifying projects, including eligible manufacturing and energy-related projects.
Because SBA 504 financing is typically structured with a participating lender, a Certified Development Company [CDC], and a borrower contribution, the total project size may exceed the SBA-backed portion.
Common Uses
SBA 504 financing may be used for eligible fixed-asset purposes such as:
- Owner-occupied commercial real estate
- Land acquisition
- Purchase of existing commercial buildings
- New construction
- Expansion, renovation, and modernization
- Long-term machinery and equipment
- Certain eligible debt refinancing involving qualifying fixed assets
Typical Loan Structure
A standard SBA 504 transaction commonly includes:
- A first-position loan from a participating lender
- A second-position SBA-backed loan through a Certified Development Company [CDC]
- A borrower equity contribution
The exact contribution and structure may vary depending on factors such as the type of project, business history, and whether the property is considered special-purpose.
Repayment Terms
Available SBA 504 maturity terms generally include:
- 10 years
- 20 years
- 25 years
The applicable term depends primarily on the assets being financed and program requirements.
Important Limitations
SBA 504 financing is intended primarily for long-term fixed assets. It generally cannot be used for ordinary working capital, inventory, or general operating expenses.
It is also not intended to finance passive or speculative investment real estate. Real estate financed under the program generally must satisfy applicable owner-occupancy and eligible-use requirements.
Important: SBA financing is subject to lender underwriting and SBA eligibility requirements. White Feather Capital LLC is not an SBA lender. See our SBA Business Financing Disclosure for additional information.