Established by Congress in 1986, the SBA 504 Loan Program provides healthy, expanding businesses with long-term, below-market, fixed-rate financing for the acquisition of land and building, machinery and equipment, and construction and renovation.
SBA 504 Loan Program
Grow Your Small Business with a SBA 504 Loan
Eligible Businesses
- Any for-profit businesses—corporation, partnership or proprietorship—are eligible to apply. The business tangible net worth may not exceed $15 million and the net profit after tax may not exceed $5 million.
Ineligible Businesses
- Not for profits
- Speculative Developers
- Insurance Companies
- Gambling Concerns
- Private Clubs that restrict membership
Maximum Amount of SBA Participation
- Up to 40% of eligible cost, with a $5,000,000 maximum
- Manufacturers and energy efficiency projects are eligible for up to $5,500,000
- These projects enable unlimited access to SBA funding and the total project size is unlimited
Eligible Use of Funds
- Purchase of land
- Construction of building
- Purchase of building
- Modernization, renovation or improvement of building
- Purchase of machinery or equipment with useful life of 10 years or more
Ineligible Use of Funds
- Working Capital
- Inventory
- Rolling Stock
Financing Method
- Private lender provides 50% of project cost, and SBA 504 Loan provides 40%
- Equity requirements are at least 10%
Loan Terms
- Maximum of 40% of project
- Terms of 20 years for real estate, 10 years for machinery and equipment
- Fixed, below-market interest rate
- Total fees of 2.17%, plus an attorney closing fee
- Fees can be included in the 504 loan amount and financed over a 20-year term
- Bank Financing
- CDC/SBA 504 Loan
- Existing Equity
Sample Financing Breakdown
This breakdown would be for a project with total costs of $1 million:
Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
---|---|---|---|---|---|
Private Lender | $500000 | 50% | 10 years | Market | 1st Mortgage |
CDC/SBA | $400000 | 40% | 20 years | Below Market/Fixed | 2nd Mortgage |
Business/Borrower | $100000 | 10% | n/a | n/a | n/a |
Special Purpose Projects
SBA defines certain properties as special purpose. This list is not intended to be all-inclusive.
- Car wash business
- Gas stations
- Hotels, motels and other lodging facilities
- Hospitals, nursing homes and assisted living centers
- Marinas
- Farms, including livestock and dairy facilities
Sample Financing Breakdown for Special Purpose Projects
This breakdown would be for a project with total costs of $1 million
Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
---|---|---|---|---|---|
Private Lender | $500000 | 50% | 10 years | Market | 1st Mortgage |
CDC/SBA | $350000 | 35% | 20 years | Below Market/Fixed | 2nd Mortgage |
Business/Borrower | $150000 | 15% | n/a | n/a | n/a |
Startup Businesses
The SBA defines startup businesses as those that have been in operation for less than two years. These businesses are eligible for SBA 504 loans; however, they require an additional 5% down payment. (Financing breakdown is same as table above)
Sample Financing Breakdown for Special Purpose Projects and Startup Businesses
This breakdown would be for a project with total costs of $1 million
Entity | Loan Amount | Percent of Project | Term | Interest | Collateral |
---|---|---|---|---|---|
Private Lender | $500000 | 50% | 10 years | Market | 1st Mortgage |
CDC/SBA | $300000 | 30% | 20 years | Below Market/Fixed | 2nd Mortgage |
Business/Borrower | $200000 | 20% | n/a | n/a | n/a |
504 Rate History
NOTE: Estimated pricing published by Eagle Compliance, LLC, the program’s fiscal agent. 25- and 20-year term loans fund every month; 10-year term loans fund every other month. Effective interest rates are inclusive of servicing fees. Servicing fees are subject to credit risk of the applicant. Official monthly SBA 504 effective interest rate tables can be found at Eagle Compliance LLC.
2024
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 6.361% | 6.381% | 6.281% | 6.695% | 6.555% | 6.354% | 6.206% | 6.045% | 5.765% | 6.076% | 6.283% | |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 6.420% | 6.490% | 6.360% | 6.767% | 6.656% | 6.445% | 6.277% | 6.115% | 5.833% | 6.146% | 6.350% | |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
10-Year | 6.526% | 6.526% | 6.587 | 6.587% | 6.908% | 6.908% | 6.493% | 6.493% | 5.875% | 5.875% | 6.459% |
2023
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 6.310% | 6.015% | 6.334% | 5.884% | 6.026% | 6.334% | 6.583% | 6.554% | 6.812% | 7.129% | 7.019% | 6.590% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 6.282% | 5.988% | 6.338% | 5.956% | 6.079% | 6.388% | 6.637% | 6.609% | 6.867% | 7.180% | 7.020% | 6.610% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
10-Year | 6.433% | 6.433% | 6.784% | 6.784% | 6.054% | 6.054% | 7.076% | 7.076% | 7.067% | 7.067% | 7.207% | 7.207% |
2022
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 3.216% | 3.598% | 3.929% | 4.680% | 5.119% | 5.191% | 5.110% | 4.981% | 5.440% | 6.439% | 6.529% | 6.110% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 3.070% | 3.454% | 3.766% | 4.620% | 5.061% | 5.132% | 5.051% | 4.892% | 5.343% | 6.362% | 6.452% | 6.032% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
10-Year | 3.070% | 3.070% | 3.820% | 3.820% | 4.931% | 4.931% | 4.974% | 4.974% | 5.332% | 5.598% | 6.534% | 6.534% |
2021
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 2.692% | 2.752% | 3.043% | 3.073% | 2.933% | 2.883% | 2.813% | 2.863% | 2.973% | 2.912% | 2.922% | 3.026% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 2.653% | 2.714% | 2.995% | 3.016% | 2.845% | 2.764% | 2.694% | 2.744% | 2.855% | 2.765% | 2.775% | 2.880% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
10-Year | 2.438% | 2.438% | 2.684% | 2.684% | 2.612% | 2.612% | 2.591% | 2.591% | 2.673% | 2.372% | 2.793% | 2.793% |
2020
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 3.710% | 3.460% | 2.878% | 3.029% | 2.758% | 2.597% | 2.406% | 2.66% | 2.406% | 2.582% | 2.552% | 2.622% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 3.639% | 3.388% | 2.804% | 2.955% | 2.683% | 2.522% | 2.341% | 2.210% | 2.361% | 2.553% | 2.523% | 2.583% |
2019
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 4.877% | 4.767% | 4.737% | 4.527% | 4.387% | 4.086% | 4.006% | 3.626% | 3.455% | 3.480% | 3.740% | 3.640% |
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 4.751% | 4.641% | 4.581% | 4.360% | 4.260% | 3.978% | 3.908% | 3.526% | 3.355% | 3.398% | 3.679% | 3.579% |
2018
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
25-Year | 5.316% | 5.346% | 5.286% | 5.207% | 5.317% | 4.987% | ||||||
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
20-Year | 4.64% | 4.94% | 4.92% | 5.024% | 5.214% | 5.314% | 5.254% | 5.294% | 5.244% | 5.153% | 5.253% | 4.922% |
2017
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
20-Year | 4.58% | 4.60% | 4.83% | 4.62% | 4.66% | 4.59% | 4.76% | 4.53% | 4.37% | 4.57% | 4.51% | 4.50% |
2016
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
20-Year | 4.82% | 4.31% | 4.54% | 4.30% | 4.31% | 4.22% | 4.08% | 4.09% | 4.08% | 3.99% | 4.35% | 4.59% |
2015
Rate | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec |
---|---|---|---|---|---|---|---|---|---|---|---|---|
20-Year | 4.59% | 4.53% | 4.79% | 4.58% | 4.84% | 5.05% | 4.95% | 4.89% | 4.89% | 4.76% | 4.74% | 4.86% |