Question 1

What is an SBA 504 loan?

Accepted Answer

An SBA 504 loan is a long-term, fixed-rate financing program for owner-occupied commercial real estate and major equipment. It uses a 50/40/10 structure: 50% from a conventional bank, 40% from a Certified Development Company (CDC) backed by the SBA, and 10% equity from the borrower.

Question 2

What are current SBA 504 rates?

Accepted Answer

SBA 504 debenture rates are set monthly and are typically below conventional commercial loan rates. As of early 2026, 20-year rates are approximately 6.2% and 25-year rates are approximately 6.3%. The bank portion rate is negotiated separately and varies by lender.

Question 3

What can SBA 504 loans be used for?

Accepted Answer

SBA 504 loans can be used for purchasing owner-occupied commercial real estate, constructing or renovating facilities, purchasing long-term machinery and equipment with a useful life of 10+ years, and refinancing existing commercial real estate debt in some cases.

Question 4

What are the SBA 504 loan limits?

Accepted Answer

The maximum SBA CDC debenture is $5 million for most businesses, or $5.5 million for manufacturers and energy-efficient projects. There is no cap on the total project cost -- the bank portion can be any amount. The minimum project size is typically $125,000.

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