SBA owner-user real estate financing

SBA 504 Loans

Long-term financing for owner-occupied commercial real estate, construction, expansion, and major fixed assets.

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Program overview

SBA 504 Loans

SBA 504 financing generally combines a first mortgage from a bank or commercial lender, a second mortgage funded through a Certified Development Company, and a borrower equity contribution.

Our team coordinates the participating lender and CDC structure and helps prepare the transaction for both credit processes.

The classic structure is typically 50% first mortgage, up to 40% SBA/CDC second mortgage, and 10% borrower equity. A 15% equity contribution is commonly required for a new business, a special-purpose property, or other higher-risk characteristics; some transactions may require additional equity.

Common uses

Commercial real estate acquisition
Ground-up construction
Building expansion or renovation
Major machinery and equipment
Eligible debt refinancing
Typical SBA 504 structure

Three sources combine to finance the project.

CompanyCash DownBankFinancingSBA-5042nd Mortgage
PercentAmount
Bank Financing50%$500,000
SBA-504 2nd Mortgage40%$400,000
Company Cash Down10%$100,000
Total Project$1,000,000
1st Lien PositionBank or Commercial LenderTypically funds approximately 50% of eligible project costs through the first mortgage, secured by a first lien on the property.
2nd Lien PositionSBA / Certified Development CompanyTypically funds up to 40% through a long-term, fixed-rate second mortgage, subordinate to the bank's first lien.
Borrower EquityBorrowerTypically contributes 10% as a cash or equity injection; 15% is common for startups or special-purpose properties.
Illustrative structure only. Final percentages may change based on business age, property type, project costs, collateral, lender requirements, and SBA eligibility.
Our role

Banker-led structuring from initial review through closing.

Our team evaluates the transaction, analyzes repayment ability, prepares the lending presentation, coordinates lender questions and documentation, and remains involved through approval and closing.