About this programme
The SBA 504 Loan Program (CDC/504) provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation. The maximum 504 loan amount is $5.5 million, and total project financing can run from $25,000 to $5.5 million.
504 loans are made available exclusively through Certified Development Companies (CDCs) — community-based, nonprofit organizations certified and regulated by the SBA. A CDC works alongside a private-sector lender to structure and fund each project; the SBA itself does not lend the money directly.
The program is built for buying, building, or upgrading the physical assets a business runs on — real estate, buildings, or long-life machinery and equipment — rather than for day-to-day working capital.
How it works
Each 504 project is financed in three layers. A third-party private-sector lender provides a loan with a senior lien covering up to 50% of the project cost.
A CDC provides a loan backed by a 100%-SBA-guaranteed debenture, secured by a junior lien, covering up to 40% of the total project cost.
The borrower contributes at least 10% of the total project cost as equity.
Financing can be structured over 10-, 20-, or 25-year maturities. Real estate financing can run up to 25 years and equipment financing up to 10 years. Interest rates on the CDC/debenture portion are fixed, pegged to an increment above the 10-year U.S. Treasury rate, adding up to roughly 3% over that benchmark.
CDCs help applicants navigate the lender channel and put the private-lender and CDC portions of the financing together into a single project.
Who can apply
The business must be an operating, for-profit enterprise located in the United States, and must meet SBA small-business size requirements.
The business cannot be engaged in nonprofit, passive, or speculative activities, and must not fall into one of SBA's ineligible-business categories.
Applicants must demonstrate qualified management, a feasible business plan, good character, and the ability to repay the loan.
Proceeds must go toward the program's permitted uses (below) — the program is not available for working capital or inventory financing.
How to apply
- Locate a Certified Development Company (CDC) serving your area using SBA's CDC directory on sba.gov.
- Work with the CDC and a participating private-sector lender together, since a 504 project is financed jointly by both.
- Submit your application and required documentation through the CDC, which packages and coordinates the SBA-guaranteed debenture portion of the financing.
- Alternatively, contact your local SBA district office for a referral to a CDC in your area.
Frequently asked
What can an SBA 504 loan be used for?
Purchasing, constructing, or renovating buildings or land; buying long-term machinery and equipment with a minimum 10-year useful life (including AI-supported manufacturing equipment); and qualified debt consolidation or refinancing under specific conditions. It cannot be used for working capital, inventory, or real estate speculation.
How is a 504 loan structured?
In three parts: a private-sector lender covers up to 50% of the project cost with a senior lien, a Certified Development Company (CDC) covers up to 40% through a 100%-SBA-guaranteed debenture with a junior lien, and the borrower contributes at least 10% equity.
What is the maximum 504 loan amount?
The maximum 504 loan amount is $5.5 million, with total project financing ranging from $25,000 to $5.5 million depending on the deal.
Can I apply for a 504 loan directly through the SBA?
No. 504 loans are available exclusively through Certified Development Companies (CDCs) — nonprofit organizations certified and regulated by the SBA — working with a participating private-sector lender.
What are the repayment terms and interest rates?
Maturities of 10, 20, or 25 years are available, with real estate financing running up to 25 years and equipment financing up to 10 years. The CDC/debenture portion carries a fixed interest rate pegged to an increment above the 10-year U.S. Treasury rate, adding up to roughly 3%.
Who is eligible to apply?
Operating, for-profit businesses located in the U.S. that meet SBA size standards, are not engaged in nonprofit, passive, or speculative activities, and can demonstrate qualified management, a feasible business plan, and the ability to repay.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.