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What is the SBA 504 loan program?

The 504 loan program is an economic development program designed to finance fixed assets for small businesses on reasonable terms and to stimulate employment through a job retention/creation goal.

What are fixed assets?

Fixed assets are purchase/construction/renovation of a building, purchase of furniture, fixtures, equipment and machinery, and leasehold improvements.

What debt is eligible to be refinanced?

  • Debt that is more than 2 years old used for Land, Building, Equipment and has been current for the previous 12 months
  • Cash out may not exceed 20% of the fair market value of the fixed assets
  • Cash out maximum LTV is 85%

How do I know if I’m qualified for an SBA 504 loan?

Your business must:

  • be owner operated
  • be for-profit
  • be structured as a sole proprietorship, corporation, partnership or limited-liability corporation (LLC)
  • occupy at least 51% of your building space
  • have less than $15 million tangible net worth or after-tax net profit must be $5 million or less, on average, for the prior two years.

What are some benefits for a small business to use the 504 program?

  • You get up to 90% financing which helps to preserve working capital
  • 10, 20 and 25 year fixed rate options for financing
  • Most professional fees, closing costs and soft costs can be rolled into the loan and can be financed
  • Predictable monthly payments

What is the maximum I can borrow?

For a small business we can finance up to $5 million and for a small manufacturing business we can finance up to $5.5 million per location

Is there a penalty if I want to pay my loan off before the end of the term?

There is a declining prepayment penalty. For loans with a term of 20 or 25 years there is a prepayment penalty for the first 10 years. For loans with a term of 10 years, there is a prepayment penalty for the first 5 years.

Are there other programs specifically made to assist veterans?

Yes! Read more about our VetLoan Advantage program here.


If you still have questions about the 504 loan program that was not covered above, please email us at or call us at 770-536-7839.