504 loans

Long-term, fixed rate financing of up to $5 million for major fixed assets.

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What is the 504 loan program?

The 504 loan program provides long-term, fixed rate financing for major fixed assets that promote business growth and job creation.

504 loans are available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by SBA.

The maximum loan amount for a 504 loan is $5.5 million. For certain energy projects, the borrower can receive a 504 loan for up to $5.5 million per project, for up to three projects not to exceed $16.5 million total.

Am I eligible?

To be eligible for a 504 loan, your business must: 

  • Operate as a for-profit company in the United States or its possessions
  • Have a tangible net worth of less than $15 million
  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application

Other general eligibility standards include  falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.

Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.

How do I use a 504 loan?

A 504 loan  can be used for a range of assets that promote business growth and job creation. These include the purchase or construction of: 

  • Existing buildings or land 
  • New facilities 
  • Long-term machinery and equipment with a useful remaining life of a minimum of 10 years, including project-related AI-supported equipment or machinery for manufacturing products

Or the improvement or modernization of: 

  • Land, streets, utilities, parking lots and landscaping 
  • Existing facilities 

A 504 loan  cannot  be used for: 

  • Working capital or inventory 
  • Consolidating, repaying or refinancing debt 
  • Speculation or investment in rental real estate
  • The financing of AI-related working capital, intellectual property, or consulting services soft costs

What do I need to apply?

504 loans are available exclusively through Certified Development Companies (CDCs).  Find a CDC  in your area to ensure you are dealing with a qualified lender. CDCs are uniquely qualified to understand 504 loan program regulations, and will help you navigate the lender channels to create your project financing.

Find a CDC near you

Find Certified Development Companies (CDCs) authorized to issue 504 loans.

How do I pay back my 504 loan?

Active 504 loans

Loan repayment terms vary according to several factors. Borrowers with active 504 loans can make payments through the Central Servicing Agent, usually by ACH monthly draws.  Payments can also be made by wire or check.

Repayment terms 
  • 10-, 20-, and 25-year maturity terms are available 
Interest rates 
  • Pegged to an increment above the current market rate for 10-year U.S. Treasury issues 
  • Totals approximately 3 % of the debt, rate may be financed with the loan 

For help with your account balance, due date, or any other questions regarding the specifics of your loan, contact your CDC.

Purchased 504 debentures

Borrowers with debenture-purchased 504 loans can create an account in the MySBA Loan Portal (lending.sba.gov) to monitor their loan status and make payments.

Last updated February 20, 2024