Purchasing a building or a piece of large equipment is a significant investment for your business and it’s important to find an affordable loan. With the SBA 504 program, you can qualify for a low, fixed interest rate loan with a term of up to 25 years, and put as little as 10% down.
SBA loan programs are well-known for funding start-ups and less established businesses, but the SBA 504 loan program is different. It makes fixed asset purchases very affordable for businesses of all shapes and sizes so that they can invest in themselves and their communities. Learn more about the SBA 504 loan program’s benefits for you, and explore resources, guides, and more information on how to use an SBA 504 loan to reach higher and grow.
Below-market, fixed interest rates
Terms up to 25 years
Low down payment
What is an SBA 504 loan?
The SBA 504 loan program provides long-term, fixed rate financing of up to $5.5 million for major fixed assets, including owner-occupied real estate and heavy equipment. The program can also be used to refinance debt incurred for these types of purchases.
How it works
SBA 504 loans are unique because they are always used together with a bank loan to finance up to 90% of total project costs. Here’s how a typical 504 loan works:
- A bank funds 50% of project costs with a conventional mortgage
- Pursuit funds 40% of project costs with a 504 loan
- You make a 10% down payment on the project
So, for a $1 million project, your bank loan would be $500,000, your loan with Pursuit would be $400,000 and your down payment would be $100,000.
If you’re already working with a bank, we’ll partner with them to blend SBA 504 into your financing plan. If you aren’t, our SBA 504 lenders can help you find a bank that’s familiar with the SBA 504 loan program.
Program details
- Loan amounts: $50,000 to $5.5 million for the 504 portion of the loan. That means that significantly larger projects can be financed using a 504 loan
- Terms: 10- 20- and 25-year terms are available
- 504 loan rates: Below market rate that is fixed for the life of your loan. View current SBA 504 loan rates
- Time to funding: Your 504 loan will be funded on approximately the same timeline as your first mortgage (bank loan)
Is the SBA 504 loan program right for me?
If you’re looking to fund an owner-occupied commercial real estate or other fixed asset purchase, you may be a candidate for the 504 loan program. Start an SBA 504 loan application online and one of our SBA 504 lenders will schedule a time to speak with you one-on-one to learn more about your project, go over SBA 504 loan requirements, and determine if it’s the right option for you.
What can you use the SBA 504 loan program for?
The SBA 504 loan program is versatile and can be used to fund a variety of fixed-asset expenses. Here’s how you can use a 504 loan:
- To purchase owner-occupied commercial real estate, such as an office, manufacturing facility, storefront and more
- To purchase land and construct a business location
- As a business construction loan to renovate or improve these types of facilities
- To purchase heavy machinery or equipment
With the SBA 504 loan program through Pursuit, you’ll find an affordable loan option that can put owner-occupied commercial real estate and other fixed-asset purchases within reach.