SBA 504 Loans — As Little as 10% Down
The SBA 504 loan program is one of the most powerful financing tools available to American small businesses. It allows you to purchase commercial real estate or major equipment with just 10% down and a below-market fixed interest rate — preserving your working capital for running your business.
How the SBA 504 Loan Works
The SBA 504 loan program uses a unique three-party structure that benefits the borrower. A conventional lender provides 50% of the project cost, a Certified Development Company (CDC) backed by the SBA provides 40%, and the borrower contributes just 10%. This structure allows businesses to acquire commercial property with significantly less capital outlay than traditional financing.
The CDC portion carries a fixed interest rate tied to U.S. Treasury rates, which means your largest loan component has a predictable, locked-in payment for the life of the loan. This protects your business from rising interest rates — a critical advantage in today's market.
What You Can Finance with a 504 Loan
Eligibility Requirements
Why Choose 3A Lending for Your 504 Loan
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Frequently Asked Questions About SBA 504 Loans
What is an SBA 504 loan?
An SBA 504 loan is a government-backed financing program designed for purchasing commercial real estate and major equipment. It uses a three-party structure: a conventional lender provides 50%, a CDC backed by the SBA provides 40%, and the borrower contributes just 10% down.
How much can I borrow with an SBA 504 loan?
SBA 504 loans can fund projects up to $5.5 million through a combination of a bank loan, a CDC loan, and a borrower contribution. The CDC portion carries a below-market fixed interest rate tied to U.S. Treasury rates.
What are the eligibility requirements for an SBA 504 loan?
To qualify, your business must meet SBA size standards (generally under $15M net worth), be a for-profit entity operating in the U.S., use funds for fixed assets, occupy at least 51% of the property, and the project should create or retain jobs.
What is the interest rate on SBA 504 loans?
The CDC portion carries a fixed rate tied to U.S. Treasury rates, typically between 5.5% and 7.0%. The conventional lender portion may be fixed or variable. 3A Lending works with multiple partners to secure the best available rates.