504 loans
What is the 504 loan program?
The 504 loan program provides long-term, fixed rate financing for major fixed assets that promote business growth and job creation.
504 loans are available through Certified Development Companies (CDCs), SBA’s community-based nonprofit partners who promote economic development within their communities. CDCs are certified and regulated by SBA.
The maximum loan amount for a 504 loan is $5.5 million.
Am I eligible?
To be eligible for a 504 loan, your business must:
- Operate as a for-profit company in the United States or its possessions
- Have a tangible net worth of less than $20 million
- Have an average net income of less than $6.5 million after federal income taxes for the two years preceding your application
Other general eligibility standards include falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.
Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.
How do I use a 504 loan?
A 504 loan can be used for a range of assets that promote business growth and job creation. These include the purchase or construction of:
- Existing buildings or land
- New facilities
- Long-term machinery and equipment with a useful remaining life of a minimum of 10 years, including project-related AI-supported equipment or machinery for manufacturing products
- Consolidating debt under the conditions listed in 13 CFR 120.882
- , paragraph (e) and
- Repaying or refinancing debt defined as “qualified debt” under 13 CFR 120.882
- , paragraph (g)
Or the improvement or modernization of:
- Land, streets, utilities, parking lots and landscaping
- Existing facilities
A 504 loan cannot be used for:
- Working capital or inventory
- Consolidating, repaying or refinancing debt that does not meet the definition of “qualified debt” under 13 CFR 120.882
- , paragraphs (e) and (g)
- Speculation or investment in rental real estate
- The financing of AI-related working capital, intellectual property, or consulting services soft costs