Most projects follow a 50-40-10 split: the first-lien lender funds about half, the SBA 504 debenture funds up to forty percent through 504 Capital Corporation, and the borrower contributes the remainder as equity. Certain property types or startup projects can require additional equity. The 504 debenture offers fixed terms of 10, 20, or 25 years. The lending partner sets the first-lien term, and the effective 504 rate is confirmed at funding, including the note rate, servicing, and program fees. For steps and timing, see the Proven Process page.
Our Proven Process
SBA 504 funds fixed assets tied to operations. Typical uses include buying or building an owner-occupied facility, renovating or expanding an existing location, purchasing production equipment with a long useful life, and refinancing qualified debt originally used for real estate or equipment. Refinance can be structured with expansion or without expansion.
Candidates are for-profit U.S. small businesses that meet SBA size standards and use the property primarily for their own operations. Standard owner-occupancy thresholds apply by project type. Project feasibility, acceptable credit, and compliance with SBA use-of-proceeds rules are required. Newer businesses and special-purpose facilities may be asked to contribute more equity.
These summaries match common projects to the right 504 path. Full terms and checklists live on each loan-type page.
Acquisition or build for owner-occupied space. Typical structures pair a first-lien loan with a fixed SBA 504 debenture; standard occupancy thresholds apply. Eligible costs can include land, building, and related soft costs.
Production machinery and other extended useful life equipment. Structures aim for steady payments over the asset’s useful life and can include delivery, installation, and buildout when eligible.
Ground-up builds, additions, or major renovations. Funding phases with construction milestones; the 504 debenture provides a fixed term at takeout.
Replacement of qualified debt used for real estate or equipment. With expansion, refinance and add new build or equipment costs; without expansion, refinance eligible debt and, when allowed, include near-term business expenses.
504 Capital keeps SBA 504 projects moving with a clear process from structure to servicing.
Most projects follow 50-40-10: first lien about 50%, SBA 504 up to 40%, borrower equity about 10%. Startups or special-purpose properties may need more.
Owner-occupied real estate, construction or renovation, heavy machinery/equipment, and eligible refinance.
The 504 debenture is fixed for 10, 20, or 25 years and is set at funding. The lending partner sets the first-lien rate and term.
Yes, if the debt was originally for eligible fixed assets, meets SBA seasoning rules, and has a solid payment history. Refinance can be with or without expansion.