SBA 504 Loan
An SBA-backed loan program specifically for purchasing major fixed assets, like commercial real estate or heavy equipment, structured as a partnership between a bank and a Certified Development Company.
A 504 loan typically splits funding between a conventional lender (around 50%), a Certified Development Company backed by the SBA (around 40%), and a down payment from the business (around 10%), which usually results in a lower blended rate than financing the full purchase through one lender alone.
It’s built specifically for large, long-term asset purchases rather than working capital, so it’s commonly used to buy a building the business operates out of or major production equipment, not day-to-day expenses.
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