Glossary
What is SBA 504 Loan?
The SBA 504 loan program finances major fixed assets, such as owner-occupied commercial real estate, construction and long-life equipment. A typical 504 project combines a first-position loan from a conventional lender, a second-position loan from a Certified Development Company backed by the SBA, and a down payment from the borrower, often around 10%. The CDC portion carries a long-term fixed rate. Working capital and inventory are not eligible uses.
Example
A manufacturer uses a 504 loan to buy and renovate the building it will occupy.
Related funding
SBA Loans: Government-backed loans with long terms for growth, real estate and acquisitions.
Related terms
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