Established by Congress in 1986, the SBA 504 Loan Program provides healthy, expanding businesses with long-term, below-market, fixed-rate financing for the acquisition of land and building, machinery and equipment, and construction and renovation.
25-Year: 3.216% | 25-Year REFI: 3.230% | 20-Year: 3.070% | 20-Year REFI: 3.085% | 10-Year: 3.070% | 10-Year REFI: 3.096% ( As of January 2022)
SBA 504 Loan Program
Grow Your Small Business with a SBA 504 Loan
Eligible Businesses
- Any for-profit businesses—corporation, partnership or proprietorship—are eligible to apply. The business tangible net worth may not exceed $15 million and the net profit after tax may not exceed $5 million.
Ineligible Businesses
- Not for profits
- Speculative Developers
- Insurance Companies
- Gambling Concerns
- Private Clubs that restrict membership
Maximum Amount of SBA Participation
- Up to 40% of eligible cost, with a $5,000,000 maximum
- Manufacturers and energy efficiency projects are eligible for up to $5,500,000
- These projects enable unlimited access to SBA funding and the total project size is unlimited
Eligible Use of Funds
- Purchase of land
- Construction of building
- Purchase of building
- Modernization, renovation or improvement of building
- Purchase of machinery or equipment with useful life of 10 years or more
Ineligible Use of Funds
- Working Capital
- Inventory
- Rolling Stock
Financing Method
- Private lender provides 50% of project cost, and SBA 504 Loan provides 40%
- Equity requirements are at least 10%
Loan Terms
- Maximum of 40% of project
- Terms of 20 years for real estate, 10 years for machinery and equipment
- Fixed, below-market interest rate
- Total fees of 2.17%, plus an attorney closing fee
- Fees can be included in the 504 loan amount and financed over a 20-year term
- Bank Financing
- CDC/SBA 504 Loan
- Existing Equity
Sample Financing Breakdown
This breakdown would be for a project with total costs of $1 million:
| Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
|---|---|---|---|---|---|
| Private Lender | $500000 | 50% | 10 years | Market | 1st Deed of Trust |
| CDC/SBA | $400000 | 40% | 20 years | Below Market/Fixed | 2nd Deed of Trust |
| Business/Borrower | $100000 | 10% | n/a | n/a | n/a |
Special Purpose Projects
SBA defines certain properties as special purpose. This list is not intended to be all-inclusive.
- Car wash business
- Gas stations
- Hotels, motels and other lodging facilities
- Hospitals, nursing homes and assisted living centers
- Marinas
- Farms, including livestock and dairy facilities
Sample Financing Breakdown for Special Purpose Projects
This breakdown would be for a project with total costs of $1 million
| Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
|---|---|---|---|---|---|
| Private Lender | $500000 | 50% | 10 years | Market | 1st Deed of Trust |
| CDC/SBA | $350000 | 30% | 20 years | Below Market/Fixed | 2nd Deed of Trust |
| Business/Borrower | $150000 | 15% | n/a | n/a | n/a |
Startup Businesses
The SBA defines startup businesses as those that have been in operation for less than two years. These businesses are eligible for SBA 504 loans; however, they require an additional 5% down payment. (Financing breakdown is same as table above)
Sample Financing Breakdown for Special Purpose Projects and Startup Businesses
This breakdown would be for a project with total costs of $1 million
| Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
|---|---|---|---|---|---|
| Private Lender | $500000 | 50% | 10 years | Market | 1st Deed of Trust |
| CDC/SBA | $300000 | 30% | 20 years | Below Market/Fixed | 2nd Deed of Trust |
| Business/Borrower | $200000 | 20% | n/a | n/a | n/a |
504 Rate History
10-year, 20-year and 25-year effective rates below include fees to CDC, SBA and central serving agent based on debenture pricing published by NADCO.
2021
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 25-Year | 2.692% | 2.752% | 3.043% | 3.073% | 2.933% | 2.883% | 2.813% | 2.863% | 2.973% | 2.912% | 2.922% | 3.026% |
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| 20-Year | 2.653% | 2.714% | 2.995% | 3.016% | 2.845% | 2.764% | 2.694% | 2.744% | 2.855% | 2.765% | 2.775% | 2.880% |
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| 10-Year | 2.438% | 2.438% | 2.684% | 2.684% | 2.612% | 2.612% | 2.591% | 2.591% | 2.673% | 2.372% | 2.793% | 2.793% |
2020
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 25-Year | 3.710% | 3.460% | 2.878% | 3.029% | 2.758% | 2.597% | 2.406% | 2.66% | 2.406% | 2.582% | 2.552% | 2.622% |
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| 20-Year | 3.639% | 3.388% | 2.804% | 2.955% | 2.683% | 2.522% | 2.341% | 2.210% | 2.361% | 2.553% | 2.523% | 2.583% |
2019
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 25-Year | 4.877% | 4.767% | 4.737% | 4.527% | 4.387% | 4.086% | 4.006% | 3.626% | 3.455% | 3.480% | 3.740% | 3.640% |
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| 20-Year | 4.751% | 4.641% | 4.581% | 4.360% | 4.260% | 3.978% | 3.908% | 3.526% | 3.355% | 3.398% | 3.679% | 3.579% |
2018
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 25-Year | 5.316% | 5.346% | 5.286% | 5.207% | 5.317% | 4.987% | ||||||
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
| 20-Year | 4.64% | 4.94% | 4.92% | 5.024% | 5.214% | 5.314% | 5.254% | 5.294% | 5.244% | 5.153% | 5.253% | 4.922% |
2017
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 20-Year | 4.58% | 4.60% | 4.83% | 4.62% | 4.66% | 4.59% | 4.76% | 4.53% | 4.37% | 4.57% | 4.51% | 4.50% |
2016
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 20-Year | 4.82% | 4.31% | 4.54% | 4.30% | 4.31% | 4.22% | 4.08% | 4.09% | 4.08% | 3.99% | 4.35% | 4.59% |
2015
| Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 20-Year | 4.59% | 4.53% | 4.79% | 4.58% | 4.84% | 5.05% | 4.95% | 4.89% | 4.89% | 4.76% | 4.74% | 4.86% |
We look forward to working with you on SBA 504 financing opportunities.
