Business & equipment
SBA 504 Loans
SBA 504 financing combines a senior lender, a Certified Development Company and borrower equity to finance eligible long-term fixed assets. It can be a useful fit for an operating business buying or improving its premises.
Who it fits
Eligible businesses acquiring owner-used real estate or qualifying long-life machinery and equipment.
Work through the numbers
A practical example
Illustration: a qualifying $2 million project using a standard 50/40/10 structure has a $1 million senior loan, an $800,000 CDC portion and $200,000 of borrower equity. Additional equity or cash costs may be required; this is a structure example, not an approval.
What to have ready
- Property or equipment purchase details and eligible project budget
- Business financials, ownership and occupancy information
- Equity verification, debt schedule and required third-party reports
Questions, answered.
Start with the financing mechanics, then look at the details that can change your actual terms.
Is the entire 504 loan fixed rate?
The CDC portion has its own structure; the senior lender’s loan is separate. Evaluate the combined payment, the senior loan’s rate-reset provisions and any earlier maturity. Do not infer that one advertised fixed rate applies to the full financing.
Can 504 include working capital?
504 is designed for eligible fixed assets, not a general working-capital line. Separate the property or equipment project from operating cash needs. A different program may be needed for inventory, payroll or other uses.
How does 504 compare with 7(a)?
504 centers on eligible fixed assets and a multi-part financing structure. 7(a) can support a broader mix of eligible business uses. Compare proceeds, equity, fees, repayment structure and intended use instead of selecting solely by the headline rate.
Is 10% equity available for every project?
No. It describes a standard structure, not every borrower or property. Some transactions require a larger contribution. Confirm the operating business, property type, ownership and lender conditions before using 10% in an acquisition budget.
Can I buy an investment building with 504?
The program is not intended for passive rental speculation. An eligible operating business and the applicable occupancy rules are central. An owner-user project with some leased space needs a specific review of the actual occupancy and ownership arrangement.
What should I send CommFi to evaluate my scenario?
Start with the property or equipment details, transaction amount, intended use and timing. Include the documents listed above when available. CommFi can then assess the financing route and request scenario-specific terms. A pre-qualification is preliminary; appraisal, documentation and final lender approval can change the result.
Go a little deeper
Program references
Published references checked September 26, 2026. Third-party examples describe market programs and do not establish a CommFi lending relationship or guarantee availability.
Headline terms are illustrative best-case program features for qualified scenarios, not a loan offer or a confirmed CommFi lender commitment. Availability, proceeds and pricing depend on the lender, borrower, collateral and final underwriting. Maximum leverage, lowest pricing and fastest closing may not be available together.