Long-term, fixed-rate financing for owner-occupied commercial real estate and major equipment.
Overview
The SBA 504 program is structured for fixed-asset purchases: owner-occupied commercial real estate and large equipment. It uses a three-part structure: a conventional first mortgage from a bank (typically 50%), a second mortgage from a Certified Development Company backed by an SBA debenture (typically 40%), and the borrower's down payment (typically 10%).
Because the CDC portion is funded with long-term, fixed-rate bonds, 504 loans are known for offering some of the longest fixed-rate terms available on commercial real estate. They're an excellent fit for businesses planting roots in their own building.
Who it's for
What's typically reviewed
This is a general description, not a guarantee of approval. Specific requirements vary by lender and program. Final qualification is determined during underwriting.
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