SBA 504 Loan Program

The U.S. Small Business Administration 504 Loan Program provides approved small businesses with long-term (10 or 20 year), fixed-rate financing used to acquire fixed assets for expansion or modernization. 504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing 10% of the project costs. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.

Proceeds from 504 Loans must be used for fixed assets (and certain soft costs), including: purchase of existing buildings; purchase of land and land improvements; construction of new facilities or modernizing, renovating or converting existing facilities; purchase of long term machinery; or refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment.

To be eligible, a business must be operated for profit, have a tangible net worth not more than $15 million, and average a net income of $5 million or less after federal income taxes for the preceding two years prior to application. The maximum SBA loan amount is $5 million, although small manufacturers or specific types of energy projects may qualify for $5.5 million. Generally, a business must create or retain one job for every $65,000 guaranteed by the SBA. Small manufacturers must create or maintain a ratio of one job for every $100,000.

For additional information, visit or contact a local SBA representative at (704) 344-6563.