The SBA 504 Program

The SBA 504 program is tailored for small businesses seeking expansion while retaining working capital. SBA 504 loans, available up to $5 million ($5.5 million for manufacturing), can be used for real estate and equipment, with terms of 10, 20, or 25 years. The fixed-rate structure applies for the entire term, making debt refinance eligible. The loan program focuses on job creation, allowing entrepreneurs to borrow $65,000 per job created or retained within two years. 

The program offers: 

  • fixed, below-market interest rates
  • extended loan terms
  • lower down payment requirements

There’s no project cost limit, but CDCs can lend up to 40% of the project cost, 

Eligibility requirements include:

  • must be for-profit, with an average net income of $5 million or less and a tangible net worth of $15 million or less
  • The owner-user of the financed project must occupy at least 51% of an existing building or 60% of a newly constructed one.
  • Eligibility criteria include being a legal entity located in the United States
  • Economic development goals must align with the project financing.

Ineligible entities include:

  • not-for-profits (with an exception for sheltered workshops)
  • businesses engaged in lending, passive holders of real estate
  • those promoting religion. 

Manufacturing projects, those incorporating energy-saving technologies, and those generating renewable energy are eligible. The program emphasizes sustainable design and supports small businesses in purchasing, constructing, or retrofitting facilities with a 10% decrease in energy consumption.