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SBA 504 Loans for Small Businesses – Loans for Business Growth
SBA 504 Loans for Small Businesses – Loans for Business Growth
May 23, 2022 Last Edit: June 5, 2025
SBA 504 Loans for Small Businesses – Loans for Business Growth

What Is it?
The 504 loan is long-term fixed rate financing of up to $5 million for major fixed assets that would promote business growth and job creation.- Terms:
- 10- and 20-year terms available
- Interest Rates:
- Above the current market for 5- and 10-year Treasury issues
- Current rates are 4.92% for 10-year terms or 5.05% for 20-year terms
- Totaling approximately 3% of the debt and can finance with the loan
- Down Payment:
- Typically, only 10% of the loan’s value
Do I Qualify?
To be eligible, a business must meet the following requirements:- For-profit company in the US or its territories
- Net worth of less than $15 million
- In the 2 years preceding application, average net income of less than $5 million after federal income taxes
- Be within SBA size guidelines
- Have qualified management expertise, a feasible business plan, and good character
- Ability to repay the loan
- Meet job creation requirements
- Plan to occupy at least 51% of an existing structure or 60% of a new structure
- No prior default on a federal loan
- Not engaged in:
- Passive activities, speculative activities, lending, political/lobbying activity, or gambling activity
How Can I Use/Not Use Funds?
- Purchase or construct:
- Existing buildings or land
- New facilities
- Long-term machinery or equipment
- Improve or modernize:
- Land, streets, utilities, parking lots, landscaping, or existing facilities
- Prohibited Uses
- Working capital or inventory
- Consolidating, repaying, or refinancing debt
- Speculation or investment in rental real estate
- Purchasing and holding real estate – all real estate purchased with the loan must be utilized for business needs
How Do I Apply?
- Contact a 504-loan lender or Certified Development Company (CDC)
- Prepare your 504 loan authorization package
- Complete the SBA 504 loan application
Get to know NFIB
NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.
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