What Is an SBA 504 Loan?

The SBA 504 program is designed for long-term, fixed-asset projects like buying, building, or improving owner-occupied commercial real estate and heavy equipment. Instead of one lender taking the entire loan, a 504 deal is typically structured as a first-mortgage from a bank and a second-mortgage from a CDC backed by the SBA, with you providing 10%–20% equity. F.G. Howell helps structure and place your project with lenders and CDC partners who understand your industry and local market.

See If You Qualify

Up to 90% Financing

Bank + CDC + borrower equity structure often allows projects with as little as 10% down for eligible properties.

Long-Term Fixed Rates

The CDC/SBA portion is typically fixed for 20–25 years, helping stabilize occupancy costs over the long term.

Built for Owner-Users

Ideal for buying, building, or improving properties where your business occupies at least 51% of the space.

When an SBA 504 Loan Is a Good Fit

SBA 504 shines when you’re making a major, long-term investment in your operating location or core equipment. If your primary need is working capital or business acquisition, SBA 7(a) may be the better fit. We’ll help you choose the right lane before you start collecting paperwork.

Purchase or Build Facilities

Acquire or construct owner-occupied office, industrial, medical, retail, or special-use properties with long-term financing.

Renovation & Expansion

Fund major renovations, additions, or expansions that increase capacity, functionality, or long-term value of property.

Equipment & Fixed Assets

Finance large equipment or fixed assets that have a long useful life and are essential to your operations.

How SBA 504 Financing Is Structured

An SBA 504 project is usually built from two loans and your equity contribution. The result is higher leverage and a large portion of the debt fixed for the long term. At F.G. Howell, we help you structure the pieces so the project works for both you and the lenders.

  • Bank First Mortgage (Typically ~50%) – A conventional first-lien loan from a bank or non-bank lender, often with a 20–25 year amortization and 5–10 year rate structure.

  • CDC/SBA Second Mortgage (Typically ~40%) – A fixed-rate debenture funded through a Certified Development Company and backed by SBA, usually amortized over 20–25 years.

  • Borrower Equity (Typically 10%–15%) – Cash injection from the borrower; may increase to 15%–20% for startups or special-purpose properties.

  • Eligible Uses – Land and building acquisition, ground-up construction, major renovations, long-life equipment, and soft costs tied to the project.

  • Owner-Occupancy Requirement – Your business generally needs to occupy at least 51% of the property for existing buildings, or 60%+ for new construction with a path to 80%.

Discuss a 504 Structure Start 504 Prequalification

SBA 504 Loan Terms

Typical Scenarios

Owner-Occupied Purchase or Ground-Up Construction

Typical Project Size: $750k–$15M+
Total Financing: Up to ~90% of project costs
Amortization: Up to 25 years

Best for: Buying or building facilities your business will occupy as a long-term operating location.

Notes:
Bank first mortgage plus CDC/SBA second mortgage; higher equity may be required for special-purpose properties or startups.

Major Renovations, Additions & Expansion

Typical Project Size: $500k–$10M+
Total Financing: Up to ~90% of eligible costs
Amortization: Up to 20–25 years

Best for: Expanding square footage, reconfiguring space, or significantly upgrading owner-occupied properties.

Notes:
Can include construction, improvements, and certain soft costs tied directly to the project.

Refinance with Improvements

Typical Project Size: $750k–$15M+
Total Financing: Up to 85%–90% combined loan-to-value (subject to SBA rules)
Amortization: Up to 25 years

Best for: Refinancing existing owner-occupied CRE debt, especially when combined with property improvements.

Notes:
Must meet SBA 504 refinance guidelines, seasoning, and occupancy requirements; some cash-out for eligible business expenses may be available.

Actual terms depend on lender appetite, CDC guidelines, property type, experience, and overall risk profile. F.G. Howell will help you understand where your project realistically fits before you spend time gathering a full package.

SBA 504 / CRE Loan Payment Calculator

Estimate your combined monthly payment based on total financing amount, rate, and term. This is a simple payment estimate,
not a commitment to lend or a full two-note 504 breakdown.

$1,500,000

$500,000 – $15,000,000

7.0%

Use an estimated blended rate for the bank and CDC portions.

25 years

Many SBA 504 projects amortize over 20–25 years.

Estimated Monthly Payment
$0 / month

Total Estimated Repayment
$0
Estimated Total Interest
$0

This calculator provides an estimate only and does not include SBA fees, construction interest, or closing costs.
Actual terms will depend on lender underwriting, CDC guidelines, and your financial profile.

Ready to see how a 504 structure might look for your project?

Start 504 Prequalification

SBA 504 Requirements & Documents

Each CDC and lender has its own preferences, but most SBA 504 projects follow a similar underwriting pattern. During pre-qualification we keep it focused, then build a complete package once there’s a clear path forward.

Typical Borrower & Property Profile

  • For-profit U.S. business meeting SBA size standards
  • Property primarily owner-occupied
  • 2+ years operating history preferred
  • Startups Considered
  • Consistent or improving cash flow to support new debt
  • Owners generally 680+ credit with reasonable personal finances
  • Willingness to provide personal guarantees and project equity

Common Documentation Requested

  • Last 2–3 years business tax returns
  • Year-to-date P&L and balance sheet
  • Personal tax returns (typically 2 years)
  • Personal financial statements for all guarantors
  • Current debt schedule and real estate schedule
  • Purchase contract, construction budget, or project cost breakdown
  • Rent roll and projected occupancy (if applicable)
Take the Next Step

Is SBA 504 the Right Fit for Your Project?

Whether you’re purchasing your first building, expanding into a larger facility, or refinancing existing debt, a short conversation can clarify whether SBA 504 is the best path. F.G. Howell represents your interests from first look through closing.

Request SBA 504 Review

SBA 504 Loan FAQs

Many SBA 504 projects fall in the $750,000 to $15,000,000+ range when you combine the bank and CDC portions. The exact maximum depends on your project type, industry, and how SBA allocates debenture limits.

SBA 504 is focused on long-term fixed assets: land and building acquisition, ground-up construction, major renovations, long-life equipment, and certain soft costs tied to the project. It’s generally not used for working capital, inventory, or pure business acquisitions without real estate.

SBA 504 is built for owner-occupied real estate and large fixed-asset projects, usually with a two-loan structure and long-term fixed rates on the CDC piece. SBA 7(a) is more flexible for acquisitions, working capital, partner buyouts, and smaller real estate deals under a single loan.

Many projects require around 10% equity from the borrower, with the rest coming from the bank and CDC. Startups and special-purpose properties (such as hotels or certain medical facilities) may require 15%–20% total equity.

Generally no. SBA 504 is intended for properties primarily occupied by the operating business. Pure investment or passive real estate is not eligible, but some multi-tenant scenarios can work when your business occupies the required percentage.

Features

Why Work With F.G. Howell on SBA 504?

CRE & SBA Focus

We specialize in SBA and commercial real estate financing, so your project isn’t a one-off file on someone’s desk.

Lender & CDC Network

Access to a curated mix of banks and CDC partners so you’re not limited to a single credit box or appetite.

Project Structuring

We help align costs, timelines, and loan structure with SBA 504 rules so there are fewer surprises mid-process.

Advocacy, Not Just Intake

We don’t just upload documents; we present a coherent story to lenders and CDCs on your behalf.

Repeatable Process

A refined packaging and closing process designed for complex SBA and CRE deals, not just simple term loans.