SBA 504 financing provides fixed-asset financing for owner-occupied commercial real estate and major equipment with a useful life of at least 10 years. SBA 504 loans offer long repayment terms, a relatively low cash injection, and fixed-rate stability designed for significant, long-term investments.
This structure helps business leaders preserve working capital with a predictable financing obligation.
TowneBank SBA Lending works with a Certified Development Company (CDC) to help small business owners access financing through the U.S. Small Business Administration’s 504 loan program.
Basic SBA lending eligibility allows businesses that will occupy at least 51% of an existing building or 60% of new construction to apply.
Have questions about SBA financing? Tell us about your project, and a member of our SBA Lending team will help you explore potential financing options and next steps.
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SBA Preferred Lender
With in-house approvals, your SBA 7(a) loan and its SBA guarantee do not wait in the SBA's underwriting queue, so decisions come faster, and your closing timeline stays on track.
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Top 50 National SBA Lender
Ranked #34 among U.S. SBA lenders, reflecting a consistent commitment to SBA financing and support for business owners nationwide, from first-time buyers and startups to established, growing companies.
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Real Volume and Real Experience
Since October 1, 2025, TowneBank SBA Lending has approved $192.8 million in SBA loans, reflecting extensive experience supporting business acquisitions, commercial real estate purchases, practice financing, and growth-focused transactions.
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SBA Lending Is Our Entire Business
More than 50 professionals work exclusively on SBA lending, bringing specialized expertise to every transaction, from the first conversation through closing and servicing, and supporting business owners across 48 states.
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TowneBank SBA Lending
Specialized SBA lending expertise backed by the resources of a $22.6 billion relationship bank with more than 70 banking offices across its footprint, giving you local support at every step.
When your lease is ending, rent is climbing, or your landlord controls too much of your future, buying your building (or investing in major equipment) can be the better long-term move.
A conventional purchase could require a 25% down payment, plus closing costs. These conventional financing requirements often leave sound businesses with too much cash tied up in a single asset.
However, another renewal could bring a higher rate, or you could lose the location your business depends on.
This SBA program could put ownership within reach with far less cash required at closing, helping you secure your business's real estate, equipment, and long-term future.
SBA 504 loan requirements make the program a strong fit for small businesses investing in eligible fixed assets:
The appropriate structure may also depend on the project size and assets being financed. Buying a business? The 7(a) may be the better fit. Buying investment property? Consider a conventional commercial mortgage. If you are buying both a business and its building, 7(a) and 504 financing can combine on one deal.
Business owners should also note that the SBA all-available-collateral rule does not apply to the 504 program, so personal assets are usually not pledged. This is often a meaningful reason why borrowers choose this program.
This SBA structure uses a three-part framework:
The bank loan funds the larger share of the approved Total Project Cost.
The CDC (the SBA's nonprofit partner in the 504 program) funds a second piece backed by the SBA.
The borrower provides a comparatively low cash injection.
We work with CDCs across the country and will be glad to introduce you to one that works in your region.
With this structure, SBA 504 financing provides long loan terms, fully amortizing payments, and fixed interest rates for stability on the CDC-financed piece, while allowing financing of up to about 90% of Total Project Cost.
As a result, borrowers typically need substantially less cash at closing than they would with a conventional loan for significant real estate or fixed-asset investments in equipment or major machinery.
When considering SBA loan rates, the more important factor to consider is how the complete structure affects your cash requirements and long-term payments.
View SBA Loan RatesAt TowneBank SBA Lending, our SBA 504 loan packages follow a defined process: Pre-screen, Proposal Letter (Term Sheet), Completing Submission, Underwriting, Closing, and Post-Closing and Servicing, with Construction as a conditional review step for construction deals.
An important consideration for borrowers is recognizing that the SBA 504 program requires two underwritings: the bank’s and the CDC’s. The CDC then sends its package to the SBA for approval, so this process generally takes longer than a 7(a) loan. Appraisal, Environmental Report and possibly other third-party reports will be required.
Complete financial statements and documents are the borrower’s most important lever for accelerating the process and keeping the file moving.
At closing, a dedicated closer coordinates the final requirements.
Afterward, a dedicated Portfolio Manager becomes your primary point of contact for the life of the loan.
SBA 504 financing follows a defined process involving both bank and CDC underwriting. Understanding what happens at each stage can help keep your project moving efficiently.
| Stage | What Happens | Borrower Expectations |
|---|---|---|
| Pre-Screen | Initial review of the project, borrower qualifications, and financing request. | Provide financial information and project details as completely as possible. |
| Proposal Letter (Term Sheet) | Preliminary financing structure and proposed terms are presented. | Review proposed structure and determine whether to proceed. |
| Completing Submission | The full loan package is assembled for underwriting review. | Submit all requested financial statements, business documents, and project details. |
| Underwriting | Both the bank and the CDC perform underwriting reviews. The CDC subsequently submits its package to the SBA for approval. | Respond promptly to information requests. Appraisals and other third-party reports may be required. |
| Construction Review | Required only for construction projects and reviewed alongside the financing request. | Provide construction budgets, plans, contractor information, and related project documentation. |
| Closing | Final documentation is completed and financing is closed. | Work with the dedicated closer to satisfy final requirements. |
| Post-Closing & Servicing | Ongoing loan servicing and relationship management. | A dedicated Portfolio Manager becomes your primary point of contact for the life of the loan. |
The SBA 504 program generally takes longer than a 7(a) loan because it requires both bank and CDC underwriting, followed by SBA approval. Complete financial statements and documentation remain the borrower's most important tool for keeping the process moving efficiently.
SBA 504 loans are designed for the fixed assets that give your business a place to operate, room to grow, or the equipment to do the work.
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Building or Renovating
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Build or ExpandBuild, expand, or substantially renovate the space your business needs for its own operations.
Construction FinancingCommercial construction loans support eligible ground-up construction and major additions to help you expand your business. -
Buy Your Building
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Own the BuildingReplace rent with ownership by financing the building where your business operates.
Long-Term Real Estate FinancingAn SBA commercial real estate loan provides long-term financing for eligible owner-occupied property. -
Major Equipment
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Major EquipmentFinance machinery and equipment with a life of 10 years or more in the same long-term loan as your real estate.
Flexible FinancingWhen the deal includes both a business and its building, a 504 and a 7(a) combine on one deal with an SBA 7(a) lender.
SBA loan requirements provide a straightforward starting point.
The all-available-collateral rule does not apply to this program, creating increased collateral flexibility.
SBA 504 or 7(a): Which Fits Your Deal?
Quickly compare the 504 versus 7(a):
| SBA 504 or 7(a): Which Fits Your Deal? | SBA 7(a) Loan | SBA 504 Financing |
|---|---|---|
| What It Finances | Acquisitions, buyouts, real estate, equipment, construction, expansion | Owner-occupied real estate and major equipment |
| How Funds Can Be Used | Multiple eligible uses in one loan (including working capital within a larger transaction) | Eligible fixed assets with a useful life of at least 10 years |
| Typical Structure | Cash-flow-based; up to about 90% of total project cost | Fixed-asset financing through a certified development company (CDC) |
| Cash at Closing | Up to 100% financing in specific qualifying situations | Equity injection varies by project |
| Can They Combine? | Yes, on eligible transactions | Yes, with 7(a) on eligible transactions |
| Process | Preferred Lender, in-house approval; 10-business-day credit decision goal once an underwriter is assigned | Additional CDC underwriting; longer timeline |
| What It Finances | Acquisitions, buyouts, real estate, equipment, construction, expansion |
|---|---|
| How Funds Can Be Used | Multiple eligible uses in one loan (including working capital within a larger transaction) |
| Typical Structure | Cash-flow-based; up to about 90% of total project cost |
| Cash at Closing | Up to 100% financing in specific qualifying situations |
| Can They Combine? | Yes, on eligible transactions |
| Process | Preferred Lender, in-house approval; 10-business-day credit decision goal once an underwriter is assigned |
| What It Finances | Owner-occupied real estate and major equipment |
|---|---|
| How Funds Can Be Used | Eligible fixed assets with a useful life of at least 10 years |
| Typical Structure | Fixed-asset financing through a certified development company (CDC) |
| Cash at Closing | Equity injection varies by project |
| Can They Combine? | Yes, with 7(a) on eligible transactions |
| Process | Additional CDC underwriting; longer timeline |
If you are buying both, the two programs can sometimes work together.
Whether you're purchasing owner-occupied real estate, financing major equipment, or planning a construction project, our SBA Lending team can help you determine if the 504 program is the right fit.
Get started with a conversation. We'll review your project, discuss financing options, and help you understand the next steps.
Our SBA Lending team works with business owners and professionals across a wide range of industries and transaction types, helping clients access financing for acquisitions, ownership transitions, commercial real estate, expansion, equipment purchases, and construction projects.
Entrepreneurs and operators purchasing existing businesses, franchises, competitors, or additional locations.
Owners financing partner buyouts, succession plans, ownership transitions, and growth initiatives.
Businesses acquiring owner-occupied commercial real estate or refinancing properties used in daily operations.
Businesses constructing new facilities, expanding locations, renovating properties, or investing in long-term infrastructure.
Healthcare providers, attorneys, CPAs, engineers, architects, veterinarians, dentists, and other professional-service firms.
We frequently work alongside attorneys, CPAs, business brokers, consultants, contractors, and commercial real estate professionals to help clients evaluate financing opportunities and navigate complex transactions.
Your SBA 504 Financing Questions, Answered
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It finances eligible owner-occupied commercial real estate and major equipment with a useful life of at least 10 years.
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Usually not. The SBA’s all-available-collateral rule does not apply to this program, so personal assets are generally not pledged.
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A Certified Development Company is the SBA’s nonprofit partner that delivers this program alongside participating lenders.
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A 504 generally takes longer than a 7(a) because it involves two underwritings and an SBA approval. Providing complete documents keeps the process moving.
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Yes. An SBA 504 and SBA 7(a) loan can combine on one deal when each program finances an eligible part of the transaction.
If your business is ready to own its space or expand to a larger location you will own, we'd welcome the opporutnity to discuss whether SBA 504 financing fits your deal.
Complete the form below to connect with an SBA lending specialist who can review your project, answer your questions, and help determine the next steps.
Some applications may require further consideration, and additional information may be required.
Credit terms are subject to approval.
Amount of Credit is subject to SBA program.