SBA 504 Loan for Real Estate

If you’re looking to purchase commercial real estate for your business, an SBA 504 loan may be one of the most affordable financing options available.

Designed specifically for owner-occupied commercial properties, the SBA 504 Loan Program helps small businesses purchase, construct, renovate, or refinance commercial real estate with lower down payments and long-term fixed-rate financing.

Whether you’re buying your first office building, expanding into a larger facility, constructing a new location, or purchasing industrial property, SBA 504 financing can help make ownership more accessible.

What Is an SBA 504 Loan for Real Estate?

The SBA 504 loan program is a government-backed financing solution that helps small businesses acquire fixed assets, primarily commercial real estate.

Unlike conventional commercial mortgages that may require significant down payments and shorter repayment terms, SBA 504 loans are designed to support long-term business growth.

The financing structure typically includes:

• 50% from a private lender
• 40% from a Certified Development Company (CDC) backed by the SBA
• 10% borrower contribution

This structure allows many businesses to preserve working capital while securing the property they need to grow.

Learn more: How SBA 504 Loans Work

What Types of Real Estate Can Be Financed with an SBA 504 Loan?

An SBA 504 loan can be used to finance a wide variety of owner-occupied commercial properties, including:

Office Buildings

Purchase or construct office space for your growing business

Check out SBA Loans for Dental Offices

Medical Buildings

Healthcare providers often use SBA 504 financing to purchase medical offices, clinics, and specialty facilities.

Check out SBA Loans for Medical Practices

Industrial and Manufacturing Facilities

Manufacturers can finance warehouses, production facilities, and industrial buildings. 

Retail Properties

Retail businesses can purchase storefronts and commercial locations rather than continuing to lease.

Check out SBA Loans for Restaurants

Mixed-Use Commercial Properties

Certain mixed-use properties may qualify when SBA occupancy requirements are met.

Check out SBA Loans for Gas Stations

Hotels and Hospitality Properties

Owner-operated hospitality businesses may qualify under specific SBA guidelines.

Check out SBA Loans for Hotels

SBA 504 Owner-Occupancy Requirements

One of the most important SBA 504 requirements is owner occupancy.

Generally:

• Existing buildings require at least 51% owner occupancy.
• Newly constructed buildings require at least 60% owner occupancy initially.
• Businesses may lease excess space to tenants if occupancy requirements are maintained.

Because the SBA program is designed to help operating businesses rather than real estate investors, investment properties typically do not qualify.

Full checklist: SBA 504 Loan Requirements

Benefits of Using an SBA 504 Loan for Real Estate

Low Down Payment Requirements

Many borrowers can purchase commercial property with as little as 10% down.

Long-Term Fixed Rates

The SBA-backed portion of the loan typically includes long-term fixed interest rates, providing predictable payments.

Preserve Working Capital

Lower down payment requirements allow businesses to retain cash for operations, hiring, inventory, and growth.

Build Equity Instead of Paying Rent

Owning commercial real estate can help businesses build long-term wealth while controlling occupancy costs.

Finance Construction and Improvements

SBA 504 financing can often be used for construction projects, renovations, and property improvements.

SBA 504 Loan Amounts for Real Estate

SBA 504 loans can finance projects ranging from hundreds of thousands of dollars to several million dollars.

The total financing available depends on:

• Property value
• Project costs
• Business qualifications
• Cash flow
• Occupancy requirements

Many businesses use SBA 504 loans to finance projects exceeding $1 million.

Who Qualifies for an SBA 504 Real Estate Loan?

Businesses may qualify if they:

• Operate as a for-profit business
• Meet SBA size standards
• Occupy the property being financed
• Demonstrate repayment ability
• Have acceptable credit and financial history

Lenders also review business financial statements, tax returns, management experience, and overall project viability.

See current details: SBA 504 Loan Rates & Terms

SBA 504 Loan vs. Conventional Commercial Real Estate Financing

For many business owners, SBA 504 financing provides greater purchasing power while preserving capital for growth.

Why Business Owners Choose SBA 504 Financing

Commercial real estate is often one of the largest investments a business will make.

The SBA 504 program helps business owners secure long-term financing, reduce upfront costs, and gain greater control over their future operating expenses.

Rather than continuing to lease space and build equity for a landlord, many companies use SBA 504 financing to invest in their own future.

Get prepared: SBA 504 Loan Application Checklist

Explore SBA 504 Real Estate Financing

Whether you’re purchasing your first commercial property, building a new facility, or expanding into a larger location, SBA 504 financing may help make your project possible.

Contact us today to discuss your commercial real estate goals and determine whether an SBA 504 loan is right for your business.

Estimate Your SBA 504 Loan Payment

Before moving forward, it’s important to understand what your loan could look like financially.

Use our SBA 504 Loan Calculator to estimate your monthly payment and loan structure.

Call Us at 1-855-504-LOAN

Contact APC Lending today to learn more about the SBA 504 Loan Program and take the first step toward building long-term success for your business.