SBA 504 Loans — Long-Term Financing for Fixed Assets
Purchase commercial real estate or major equipment with up to $5.5M in long-term, fixed-rate SBA financing. As a nationwide SBA Preferred Lender, Lightning SBA Loans approves your loan in-house — no lengthy SBA review wait.
What Is an SBA 504 Loan?
The SBA 504 loan program provides long-term, fixed-rate financing for major business assets — primarily commercial real estate and large equipment. It is one of the most favorable financing programs available to small businesses, offering low down payments, long terms, and rates that consistently beat conventional commercial lending.
Unlike an SBA 7(a) loan, which is a general-purpose business loan, a 504 loan is specifically designed for asset acquisition. The loan is structured as a partnership: a private lender like Lightning SBA Loans provides 50% of the project cost, a Certified Development Company (CDC) provides 40% backed by the SBA, and the borrower contributes just 10% down. This structure lets businesses acquire significant assets with minimal upfront capital.
Eligible Uses for SBA 504 Financing
SBA 504 loans must be used for fixed assets that support business growth. Common eligible uses include:
Purchase or construct owner-occupied commercial buildings — offices, warehouses, retail space, manufacturing facilities.
Manufacturing equipment, CNC machines, printing presses, agricultural machinery — any long-life business asset.
Major improvements to existing owned facilities tied to business expansion or job creation goals.
Purchase of land for business construction, including site preparation and infrastructure improvements.
Note: SBA 504 loans cannot be used for working capital, inventory, or investment properties. For general business capital needs, see our SBA 7(a) loan program.
SBA 504 Loan Structure
Here is how a typical $2M commercial property deal breaks down under the 504 structure:
| Funding Source | Portion | Example ($2M project) | Rate Type |
|---|---|---|---|
| Lightning SBA Loans (Private Lender) | 50% | $1,000,000 | Market rate |
| CDC / SBA Debenture | 40% | $800,000 | Fixed (SBA rate) |
| Borrower Down Payment | 10% | $200,000 | — |
| Total Project Cost | 100% | $2,000,000 | — |
SBA 504 Qualification Requirements
- For-profit business operating in the United States
- Business net worth under $15 million at application
- Average net income under $5 million after taxes for prior two years
- Owner-occupancy: Borrower must occupy at least 51% of existing buildings or 60% of newly constructed properties
- Job creation goal: Project must create or retain one job per $75,000 of CDC/SBA financing
- Credit score: Typically 680+ preferred; full financial profile reviewed
Ready to explore SBA 504 financing?
Free consultation with an SBA specialist. No obligation, no hard credit pull.
Apply Now → Schedule ConsultationWhy Work With an SBA Preferred Lender?
As an SBA Preferred Lender, Lightning SBA Loans approves SBA loans in-house — without waiting for the SBA to conduct its own credit review. This cuts approval timelines from 30-90 days (at non-preferred lenders) to as little as 1-2 weeks for our portion of the deal. We coordinate directly with the CDC so you have one primary point of contact throughout your 504 transaction.
Related programs: SBA 7(a) Loans | 100% Commercial Real Estate Financing | Business Acquisition Loans | About the SBA Preferred Lender Program