The SBA 504 Loan is a financing program backed by the Small Business Administration that provides small businesses with affordable, long-term capital for fixed assets. It’s delivered through a partnership between a private lender (bank or non-bank lender) and a Certified Development Company (CDC), with SBA guaranteeing a portion of the loan.
Typical 504 structure:
- 50% – Conventional first mortgage from a private lender.
- 40% – SBA-backed second mortgage through a CDC.
- 10% – Borrower down payment (may be higher for startups or special-use properties).
Common Uses of SBA 504 Financing
- Commercial Real Estate Acquisition – Buy office, retail, industrial, medical, or mixed-use buildings.
- Construction & Expansion – Build new facilities, expand existing ones, or renovate property.
- Equipment Purchases – Finance heavy machinery, manufacturing equipment, or specialty tools.
- Refinancing Debt – Refinance qualified existing debt into long-term, stable fixed-rate financing.
Loan Features
- Loan Amounts – Typically $125,000 to $20 million+.
- Terms – 10, 20, or 25-year fixed-rate options for real estate; 10 years for equipment.
- Down Payment – As little as 10%, preserving business liquidity.
- Rates – Fixed rates for the SBA-backed portion, often below conventional lending.
- Amortization – Fully amortizing (no balloon payments).
Who Qualifies?
The SBA 504 program is designed for healthy, for-profit small businesses that:
- Operate in the U.S.
- Have tangible net worth under $15 million and average net income under $5 million.
- Will occupy at least 51% of the property (or 60% for new construction).
- Use proceeds for eligible purposes such as real estate, construction, or equipment.
Aspen’s Advantage in SBA 504 Lending
- In-House Underwriting – Our credit team packages and clears loans upfront, streamlining approval.
- Preferred PLP Network – We work with SBA Preferred Lenders and CDCs to deliver faster decisions.
- Specialization in 504 Loans – Deep expertise across industries and property types.
- End-to-End Guidance – From structuring to closing, we manage the process so you can focus on running your business.
- Capital Stack Expertise – Ability to integrate SBA 504 with other financing (working capital, bridge loans, or mezzanine debt).
Why Choose SBA 504 Through Aspen Capital Solutions?
- Preserve working capital with low down payments.
- Lock in long-term, fixed interest rates.
- Build equity by owning your real estate instead of leasing.
- Finance both property and equipment in one transaction.
- Partner with a lender who shortens timelines by underwriting in-house and funding through a proven PLP/CDC network.
At Aspen Capital Solutions, SBA 504 isn’t just one of the services we offer – it’s one of our specialties. We deliver expertise, relationships, and execution speed to help small businesses secure the facilities and equipment they need for sustainable growth, shaving weeks – even months on the process.
Get started today!
Fill out the questionnaire on this page to start a discussion about your mortgage needs today!
