SBA 504 Loans for Business Owners

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Purchasing a commercial building, expanding your operating facility, or investing in major equipment can represent an important milestone for your business.

The SBA 504 Loan Program is designed to help eligible small businesses finance qualifying fixed assets that support business growth and economic development.

TDJ Equity Funding helps business owners evaluate their SBA 504 financing readiness, understand the proposed project structure, and prepare for consideration by appropriate financing partners.

The SBA 504 Loan Program provides long-term financing for eligible fixed-asset projects.

Financing typically involves a commercial lender, a Certified Development Company (CDC), and a contribution from the business borrower.

The CDC portion is backed by the SBA and generally offers long-term, fixed-rate financing.

This program may be appropriate for qualified businesses seeking to purchase or improve facilities they will occupy and use for business operations.

Eligible projects may include:

Purchase of qualifying office buildings, retail facilities, industrial properties, warehouses, and other commercial buildings intended for use by the operating business.

Construction of facilities for an eligible business, including applicable site development and improvements.

Qualifying renovations, modernization, or expansion of facilities used for business operations.

Purchase of eligible machinery and equipment meeting applicable SBA useful-life requirements.

Certain existing business debts associated with qualifying fixed assets may be eligible for refinancing under applicable SBA rules.

Not all debt qualifies.

A typical SBA 504 project may involve:

• A senior commercial lender financing approximately 50% of eligible project costs
• A CDC/SBA-backed loan financing approximately 40%
• A borrower equity contribution of at least 10%

Actual structures may differ, and certain projects require larger borrower contributions.

The SBA 504 portion may be available up to $5.5 million, depending on eligibility and applicable program limits.

The CDC/SBA-backed portion offers long-term financing with fixed-rate features.

Available maturity options include 10, 20, and 25 years, depending on the eligible asset and loan structure.

The senior lender's financing terms are established separately.

Interest rates, fees, prepayment requirements, and closing costs depend on the applicable loan components and program requirements.

TDJ Equity Funding does not advertise a guaranteed rate or loan approval.

Eligibility generally depends on the business, proposed project, and applicable SBA requirements.

Qualifying considerations include:

• An eligible for-profit operating business located in the United States
• Compliance with SBA size and eligibility requirements
• An eligible fixed-asset financing purpose
• Sufficient qualifying owner occupancy of the property
• Demonstrated ability to repay the proposed financing
• Acceptable management experience and business financial performance
• Required borrower contribution and project documentation
• Compliance with applicable SBA ownership and other eligibility policies

Eligibility is determined under current SBA rules and lender and CDC requirements.

An important SBA 504 distinction is that the program is intended to support eligible operating businesses, not passive commercial real estate investments.

For example, a qualifying business purchasing a facility for its own operations may be eligible.

An investor purchasing a building primarily to generate rental income generally would not qualify for SBA 504 financing.

TDJ Equity Funding provides separate commercial investment property financing solutions for eligible investment transactions.

Our preliminary review may consider:

• Business operating history and ownership structure
• Property purchase price or total project cost
• Intended business use and occupancy
• Requested financing amount
• Available equity contribution
• Business revenue, cash flow, and financial performance
• Existing business and property debt
• Management experience
• Project plans, budgets, and available documentation
• Ability to support the proposed debt obligations

We identify material preparation needs before determining whether the request is ready for financing partner consideration.

1. Business and Project Discovery

We discuss your operating business, proposed property or fixed-asset project, and financing objectives.

2. Preliminary Funding Readiness Review

We evaluate the financing request, general program eligibility, financial position, and available project documentation.

3. Financing Partner Consideration

When the request is sufficiently prepared, TDJ works to identify appropriate financing partners, including lenders and CDCs participating in eligible transactions.

Financing remains subject to the applicable lender, CDC, and SBA approval processes.

If your business is considering purchasing, constructing, or improving an eligible commercial facility, TDJ Equity Funding can help you evaluate the appropriate next steps.

Schedule a Business Funding Discovery Call

TDJ Equity Funding is an independent financing brokerage and advisory business, not the U.S. Small Business Administration. SBA 504 loans are arranged through eligible participating lenders and Certified Development Companies. All financing is subject to current SBA program requirements, lender and CDC underwriting, eligibility, and approval. Financing is not guaranteed.