Secure Fixed-Rate Funding for Long-Term Assets
SBA 504 Loan Program
An SBA 504 loan is long-term, fixed-rate financing with an SBA debenture of up to $5 million ($5.5 million for small manufacturers and energy projects) for major fixed assets such as commercial property and equipment, provided through an SBA Certified Development Company alongside a private lender. At Commercial Finance Partners, we guide you through eligibility, documentation, and loan structuring to help expand your operations.
Customer Testimonials
SBA 504 Loan Program Services
SBA 504 loans are designed to stimulate economic development by offering small businesses favorable terms for purchasing or upgrading fixed assets. With typically lower down payments and long-term, fixed-interest rates, these loans can significantly reduce the cost of expansion. Qualifying ventures often include manufacturing, hospitality, healthcare, and other industries seeking to invest in real estate or equipment that promotes job growth.
Commercial Finance Partners specializes in navigating the SBA’s eligibility criteria, coordinating with Certified Development Companies, and assembling the necessary documentation. We help structure the loan in a way that optimizes your monthly payments and ensures you can manage the obligations comfortably. By combining private-sector lending with government-backed guarantees, the SBA 504 Loan Program can be a game-changer for businesses looking to make substantial capital investments.
Lower Down Payments
Preserve working capital while acquiring expensive fixed assets.
Fixed Interest Rates
Protect your business from fluctuating market conditions and interest hikes.
Long Repayment Terms
Spread costs over 10–25 years, improving cash flow management.
Job Creation Focus
Support community growth and economic development through expanded business capacity.
SBA 504 Loan Program Business Case Studies
How SBA 504 Enabled a Manufacturing Plant Expansion
Added new production lines affordably:
- Locked in fixed rates
- Lowered capital barriers
- Created local jobs
- Improved output scalability
- Strengthened market position
An SBA 504 Loan Supported a Hospitality Upgrade
Purchased property with stable financing:
- Upgraded guest amenities
- Boosted occupancy rates
- Controlled long-term costs
- Streamlined cash flow
- Enhanced property value
How SBA 504 Facilitated Medical Practice Growth
Invested in modern diagnostic equipment:
- Expanded patient services
- Retained top medical staff
- Enhanced revenue potential
- Lowered operational risks
- Built stronger community trust
The importance of
SBA 504 Loan Program
Why Choose Commercial Finance Partners:
✦
We clarify SBA 504 eligibility and application steps, reducing guesswork.✦
We align financing structures with your development timeline and cash flow.✦
We collaborate with Certified Development Companies for efficient processing.✦
We maintain transparent communication on rates, fees, and documentation.✦
We champion your expansion plans, ensuring you capitalize on government-backed opportunities.
How an SBA 504 Loan Works
A 504 project typically has three sources of financing:
- Private lender: a loan with a senior lien covering 50% or more of the project cost.
- Certified Development Company (CDC): up to 40% of the project cost, funded by a debenture that the SBA guarantees 100%, with a junior lien.
- Borrower: a contribution of at least 10% of the project cost.
CDCs are nonprofit economic-development organizations certified and regulated by the SBA, and 504 loans are available only through them. The rate on the CDC portion is fixed and pegged to an increment above U.S. Treasury rates at the time the debenture is sold.
SBA 504 Loan Terms and Limits
- Maximum 504 loan: $5 million per business and its affiliates, or $5.5 million per project for small manufacturers and eligible energy public-policy projects. The minimum debenture is $25,000.
- SBA 504 projects run up to approximately $15,000,000 in total project size, including the bank first mortgage.
- Maturities of 10, 20 or 25 years, based on the useful life of the assets: up to 25 years for real estate and a minimum of 10 years for machinery and equipment.
- The private lender’s loan must run at least 7 years alongside a 10-year 504 loan and at least 10 years alongside a 20- or 25-year 504 loan.
- Since July 4, 2026, a borrower that obtains its 7(a) loan first can pair up to $5 million in 7(a) financing with up to $5 million through the 504 program, for up to $10 million in SBA-backed financing (SBA news release, May 18, 2026).
What an SBA 504 Loan Can and Cannot Finance
Eligible uses include buying, building or renovating commercial property and land; long-term machinery and equipment with a remaining useful life of at least 10 years; and refinancing qualified debt. A 504 loan cannot be used for working capital or inventory, or for speculation or investment in rental real estate. An SBA 7(a) loan can be used for short- and long-term working capital.
SBA 504 Down Payment Requirements
Every borrower contributes at least 10% of the project cost. The contribution rises to 15% for a new business or for a limited or special-purpose property, and to 20% when both apply. Sources: SBA, 504 loans; SBA, CDC/504 loan program; SBA SOP 50 10 8.1 (effective October 1, 2026).
Compare the other SBA loan programs Commercial Finance Partners arranges, including the SBA Express loan program for smaller, faster requests, and see how life insurance for SBA loans works when a 504 loan is not fully collateralized.
SBA 504 Loan FAQs
What are SBA 504 loans?
SBA 504 loans provide long-term, fixed-rate financing for major fixed assets that promote business growth and job creation, such as commercial property and long-life equipment. A private lender finances about half of the project, a Certified Development Company finances up to 40% with an SBA-guaranteed debenture, and the borrower contributes at least 10%.
What is the maximum SBA 504 loan amount?
The 504 portion is limited to $5 million for each business and its affiliates. Small manufacturers and eligible energy public-policy projects can receive up to $5.5 million per project.
How much is the down payment on an SBA 504 loan?
The minimum borrower contribution is 10% of the project cost. It increases to 15% for a new business or a limited or special-purpose property, and to 20% when the project involves both. The contribution can include cash or land that is part of the project property, subject to SBA rules.
Can an SBA 504 loan be used for commercial property?
Yes. The purchase, construction or renovation of buildings or land is an eligible use of an SBA 504 loan, with maturities of up to 25 years for real estate. Speculation and investment in rental real estate are not eligible, and when SBA financing buys an existing building, the business must occupy at least 51% of it (60% for new construction).
What is the difference between SBA 504 and SBA 7(a) loans?
A 504 loan finances fixed assets only — real estate and long-life equipment — through a Certified Development Company at a fixed rate. A 7(a) loan of up to $5 million is more flexible and can also fund working capital, inventory, business acquisitions and debt refinancing, with rates negotiated between the borrower and the lender.
The financing solutions provided by Commercial Finance Partners were exactly what I needed. Their team was professional and helped me every step of the way
Matthew Rodriguez Business Owner