What is an SBA 504 loan?

The SBA 504 loan funds fixed assets: commercial real estate, heavy equipment, and major renovations. It works through a three-way split: the lender provides 50%, a Certified Development Company (CDC) provides 40% (SBA-guaranteed), and you put down 10%. Maximum 504 loan size is $5.5 million. The structure allows 10-25 year terms at below-market rates for business owners who want to build equity in property.