SBA 504 Loans

Low-cost, fixed-rate financing for
commercial real estate

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An SBA 504 loan is a commercial real estate loan that can be used for property acquisition, refinancing, new construction, or renovation. Backed by the U.S. Small Business Administration (SBA), these loans are designated for small business owners looking to own and occupy commercial real estate for their business.

SBA 504 Loan Snapshot

$1-$15 million


Up to 90%


Up to 25 years



Current Interest Rates

Ways to Use an SBA 504 Loan

Property Acquisitions

Breaking Down a 504 Loan

SBA 504 loan funds break down into a 50/40/10 funding structure

This combination gives you up to 90% loan-to-value (LTV), which is the most unique aspect of an SBA 504 loan and the highest LTV available on commercial loans.

SBA 504 is always comprised of two separate loans. There are three players:

  • A lender (like Liberty SBF)
  • The US Small Business Administration (SBA)
  • A certified development company (CDC), which acts as the intermediary to get authorization from the SBA

We (your lender) handle the first loan, while the SBA takes on the second. However, the SBA doesn’t have access to immediate capital to fund your second loan. So, you’ll initially receive both your first and your second loan from us, as your lender. Approximately 45-60 days after receiving funds from us, the SBA will take out your second loan and set a fixed interest rate for your 25-year term.

Closing Timeline

We can close your 504 loan 45 days after receiving your signed conditional commitment letter (CCL). We issue a CCL after you accept our quote and submit all required documents.


You sign your commitment letter and pay a small deposit, which applies to your final down payment.


We do an internal credit review, source third party reports, and interface with the local Certified Development Company (CDC).


The CDC submits your loan package to the SBA.


The SBA provides authorization and approval on third party reports.


We close your loan.

The Interim Period

The interim period is the time between us closing your two loans and SBA takeout of your second loan – typically 45-60 days. This period exists because:

  • The SBA only funds approved loans once per month.
  • Approved loans must meet all conditions for funding at least 3 weeks prior to the fund date.

During this holding period, your loan will have an interim interest rate of approximately 7%. Don’t let this scare you – this rate only applies for the interim period (45-60 days) and your payments will be interest-only. Plus, these payments can be financed into the whole deal, resulting in very little or zero cash out of pocket during the interim period.

When the SBA takes out your loan, your rate lowers to match the latest debenture and becomes fixed for the term of your loan.


Most fees on 504 loans get financed into your second mortgage, giving you limited additional out-of-pocket costs.

SBA 7a to SBA 504 Refinance

With rates rising multiple times in 2022 and 2023, thousands of floating rate SBA 7a borrowers will be hit with huge increases to their monthly payments. To moderate this risk, the SBA recently changed their guidelines and now allows SBA-to-SBA refinancing.

If you hold an SBA 7a real estate loan, you may be eligible to refinance your floating rate debt with a low-cost, fixed-rate SBA 504 loan. With rates going up through the end of 2023, you can potentially save tens of thousands of dollars on interest payments.

  • Move from a risky, floating rate coupon to a long-term, fixed rate coupon.
  • Lower overall interest rate to match the current SBA 504 25-year debenture.
  • Pull cash out for working capital – up to 20% of the property’s current appraised value.
  • Most closing costs can be capitalized into the new SBA loan (leaving you with minimal out-of-pocket fees).

Eligibility Requirements

Eligibility Requirements

To qualify for a 504 loan, your business should:
  • Identify as “small,” according to the SBA’s evaluation of your industry
  • Occupy (or plan to occupy) at least 51% of the commercial property you’re purchasing or refinancing
  • Operate as a for-profit company in the continental US
  • Have a tangible net worth of less than $15 million
  • Have an average net income of less than $5 million
  • Demonstrate increasing revenue and income trends
Eligibility Requirements

Eligibility Requirements

To qualify for a 504 loan, you should:
  • Have a credit score of 680 or greater
  • Hold at least 4 years of experience in your industry
  • Possess a net worth of at least $1 million or 30% of total financing (whichever is greater)
  • Have no bankruptcies in the last five years

How to Apply

Complete your entire application online through our secure portal.


Register for our secure online portal.


Fill out and submit an online application (takes less than 30 minutes).

Review our SBA 504 document checklist.


Get connected with a loan officer and get your quote.