For many business owners, purchasing or refinancing commercial real estate can be a daunting financial step. Traditional loans often require high down payments and strict credit requirements. That’s where the SBA 504 loan comes in — designed to make property ownership more attainable for businesses that occupy the space they operate in.
What Is an SBA 504 Loan?
An SBA 504 loan is a long-term, fixed-rate loan backed by the Small Business Administration. It’s specifically structured to help owner-occupied businesses purchase, build, expand, or refinance commercial property.
Key Benefits of SBA 504 Loans
✔ Low Down Payments — Borrowers often need as little as ~10% down.
✔ Fixed and Blended Rates — Predictable monthly payments that support long-term planning.
✔ High Refinance Leverage — In certain cases, up to ~90% financing may be possible.
✔ Real Estate as Collateral — Your property itself is the primary security.
Who Qualifies for an SBA 504 Loan?
Eligibility is based on business use, cash flow, and operating history. To qualify, the borrower must:
- Operate a U.S.-based business
- Occupy the property as a primary business location
- Demonstrate stable cash flow that covers debt obligations
- Meet lending and equity requirements
Common Uses for SBA 504 Loans
- Purchase owner-occupied commercial property
- Construction and expansion of facilities
- Renovation or modernization projects
- Rate & term refinance
- Cash-out refinance to improve liquidity
Conclusion:
For qualifying business owners, SBA 504 loans present an affordable path to owning or refinancing commercial real estate. If you’re considering a property investment or refinance, an SBA 504 loan could be your most cost-effective option.
Ready to explore your options? Request a Term Sheet today.
