SBA 504 structure: 10% down from you + 50% bank loan + 40% CDC/SBA loan (fixed rate).
Purchase price + related costs (appraisal, environmental, etc.)
Please enter the total project cost.
Negotiate with your bank. Estimate only.
Current 20-yr rate ~6.07% (Apr 2026). Verify at sba.gov.
Total Monthly Payment
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⚠️ Disclaimer: This calculator provides estimates for educational purposes. Actual SBA 504 rates are set monthly at the time of debenture sale. Bank loan terms, rates, and fees are negotiable. Consult a Certified Development Company (CDC) for exact figures.
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Sources & Methodology
SBA 504 structure, rates, and fees verified against SBA.gov official program guidelines and NADCO rate data.
SBA.gov — 504 Loans Official Program Page
sba.gov — Official SBA 504 loan program requirements, eligible uses, maximum amounts, and down payment rules.
NADCO — National Association of Development Companies
nadco.org — Monthly published SBA 504 debenture rates for 10, 20, and 25-year terms.
SBA 504 Structure (standard 10% down):
Bank portion = 50% of project cost | SBA/CDC portion = 40% of project cost | Down payment = 10%
SBA fees of ~2.65% are financed into the SBA portion. Both portions calculated using standard amortization M = P x [r(1+r)^n] / [(1+r)^n - 1].
Bank portion = 50% of project cost | SBA/CDC portion = 40% of project cost | Down payment = 10%
SBA fees of ~2.65% are financed into the SBA portion. Both portions calculated using standard amortization M = P x [r(1+r)^n] / [(1+r)^n - 1].
Last reviewed: April 2026
How the SBA 504 Loan Program Works
The SBA 504 loan is one of the most powerful financing tools available to small business owners, offering up to 90% financing on commercial real estate and major equipment at fixed rates for up to 25 years. The program splits financing between three parties in a structured way that reduces risk for all sides.
SBA 504 Financing Structure
Project Cost = 10% Down + 50% Bank Loan + 40% SBA/CDC Loan
Example: $1,000,000 commercial real estate purchase
Down payment (10%): $100,000
Bank loan (50%, 7.5%, 20 years): $500,000 → ~$4,024/month
SBA 504 loan (40%, 6.07%, 20 years, incl. fees): $413,000 → ~$2,990/month
Total monthly: ~$7,014/month
Down payment (10%): $100,000
Bank loan (50%, 7.5%, 20 years): $500,000 → ~$4,024/month
SBA 504 loan (40%, 6.07%, 20 years, incl. fees): $413,000 → ~$2,990/month
Total monthly: ~$7,014/month
SBA 504 Rates: 10, 20 & 25 Year Terms (April 2026)
| Term | Approximate Rate | Use Case | Rate Basis |
|---|---|---|---|
| 10-year | ~5.86% | Equipment, machinery | 10-yr Treasury + ~2.5% |
| 20-year | ~6.07% | Commercial real estate | 10-yr Treasury + ~2.7% |
| 25-year | ~5.86% | Commercial real estate | 10-yr Treasury + ~2.5% |
SBA 504 vs. Conventional Commercial Loan
The biggest advantage of an SBA 504 is the down payment: 10% versus the 20-25% typically required by conventional commercial lenders. On a $1,000,000 property, that is $100,000 down instead of $200,000-$250,000 — preserving $100,000 or more in working capital. The fixed rate for up to 25 years also provides payment certainty that conventional variable-rate commercial loans cannot match.
Who Must Put 15-20% Down?
Startups (businesses operating less than 2 years) require 15% down. Special-use properties (gas stations, car washes, hotels, golf courses, funeral homes) require 15% down. If a project is both a startup AND special-use, 20% down is required. All other eligible businesses use the standard 10% down payment.
💡 Pro Tip: SBA 504 rates are set monthly at the debenture sale — your final rate is not locked until that sale. Work with your CDC to time the application to take advantage of favorable rate environments. Current rates are publicly available at sba.gov before each month's debenture sale.
Frequently Asked Questions
An SBA 504 loan is a government-backed financing program for small businesses to purchase, renovate, or refinance commercial real estate and heavy equipment. It features a low 10% down payment, fixed rates for 20-25 years, and split financing between a bank (50%) and a Certified Development Company (40%).
The financing is split: 50% from a bank or credit union (conventional loan, rate negotiated), 40% from a Certified Development Company backed by SBA (fixed rate, 20 or 25 years), and 10% down payment from the borrower. Total financing covers up to 90% of the project cost.
SBA 504 rates are based on the 10-year US Treasury rate plus approximately 2.5-3%. Current rates as of early 2026 are approximately: 10-year term 5.86%, 20-year term 6.07%, 25-year term 5.86%. Rates are fixed for the life of the loan at time of debenture sale.
SBA 504 fees total approximately 2.65% of the SBA loan portion plus approximately $2,500 in legal fees. These fees are financed into the SBA loan, so they are not paid out of pocket at closing.
The standard maximum SBA 504 loan (CDC portion) is $5,000,000. For manufacturers or green energy projects, the maximum increases to $5,500,000. The total project cost can be much higher since the SBA only covers 40%.
SBA 504 loans can finance commercial real estate purchase or construction, major equipment or machinery, building renovations, and refinancing existing eligible commercial real estate debt. They cannot be used for working capital, inventory, or speculative real estate.
SBA 504 loans typically take 60-90 days from application to closing. The process involves working with both a conventional lender and a Certified Development Company. Pre-application conversations can begin much earlier.
Qualifying businesses must be for-profit, meet SBA size standards (typically under $15M net worth and under $5M average net income after taxes for two years), operate primarily in the US, and have the ability to repay. Startups may require a 15-20% down payment instead of 10%.
Yes. SBA 504 loans can finance major equipment with a useful life of at least 10 years. Equipment loans typically use a 10-year term rather than the 20-25 year terms used for real estate. The same 10%/40%/50% structure applies.
SBA 504 advantages: only 10% down vs. 20-25% conventional, fixed rate for full term vs. often variable conventional, and up to 25-year amortization vs. shorter conventional terms. The tradeoff is more documentation, longer approval time, and use restrictions.
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