SBA 504 Loan Structure

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SBA 504 loans have a shared financing structure. Typically, the borrower provides a 10% down payment, a Certified Development Company (CDC) like Self-Help finances 40% of the project, and a third-party lender, generally a bank, finances 50%.

What is Self-Help’s role?

The SBA partners with local CDCs like Self-Help to administer the 504 program. We coordinate among the borrower, the bank partner and the SBA to make sure your loan is a success.

For your 504 project, we’ll:

  • Coordinate with bank partners
  • Underwrite and approve the loan
  • Manage the paperwork to submit the loan to the SBA
  • Service the loan for its full term


Eligible uses for SBA 504 loans

  • Purchases of owner-occupied land and buildings
  • New construction
  • Renovation or expansion of owner-occupied commercial real estate
  • Heavy machinery or equipment purchases and moving expenses
  • Debt refinancing of non-government guaranteed owner-occupied commercial real estate and equipment debt
  • Soft costs (e.g., appraisals, title searches, legal fees, etc.)
  • Repayment of interim financing costs


SBA 504 loan terms

For real estate loans, the bank portion of the project usually carries a 20- to 25-year amortization and has a minimum 10-year term. The Self-Help (SBA) portion is fully amortizing, with either a 20- or 25-year term. For most equipment loans, the bank portion of the project has a minimum 7-year term and the Self-Help (SBA) portion is fully amortizing, with a 10-year term. Equipment with a 20-year useful life may be eligible for a 20-year term.