TurboFunding is a lending broker, not a direct lender. Rates and terms vary based on borrower profile and lender approval. This is not financial advice.
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Fixed-rate financing for major assets
Long-term, fixed-rate financing for major fixed assets like real estate and heavy equipment.
Use of Funds
Real estate, equipment
Job Creation
Must create/retain jobs
Owner Occupancy
51% requirement
The SBA 504 loan program is specifically designed to help small businesses purchase major fixed assets — primarily commercial real estate and heavy equipment. Unlike the SBA 7(a) program which covers a broad range of uses, the 504 program focuses on long-term, fixed-rate financing for assets that promote economic development and job creation.
SBA 504 loans have a unique structure: the total project cost is split between a conventional lender (covering roughly 50%), a Certified Development Company or CDC (covering up to 40% with an SBA-backed debenture), and the borrower (contributing as little as 10% down). The CDC portion carries a fixed interest rate for the life of the loan, which protects borrowers from interest rate fluctuations — a significant advantage for long-term real estate investments.
SBA 504 rates on the CDC portion are tied to 5-year and 10-year U.S. Treasury rates plus a small spread. Because these are government-backed debentures sold on the bond market, rates are typically below conventional commercial mortgage rates. The conventional lender's portion (50%) carries a market rate that varies by lender. Your total blended rate across both portions is usually well below what you'd pay for a single conventional commercial loan.
A manufacturing company purchases a $1.2 million warehouse. Under the 504 structure: a bank provides a first mortgage of $600,000 (50%), the CDC provides a second mortgage of $480,000 (40%), and the business puts down $120,000 (10%). The CDC portion is locked at a fixed rate of approximately 5.5% for a 25-year term. Compared to a conventional commercial mortgage requiring 25% down ($300,000), the 504 program saves the business $180,000 in upfront capital.
Identify the fixed asset you plan to purchase — commercial property, land, or major equipment — and gather project cost estimates.
Submit your application through TurboFunding with your business financials, tax returns, and project details. We match you with both a conventional lender and a CDC.
Underwriting covers both the conventional loan and the CDC debenture. TurboFunding coordinates between both parties to streamline the process.
Upon dual approval, funds are disbursed at closing. The CDC debenture rate is locked in, giving you a fixed rate for the life of the loan.
A CDC is a nonprofit organization certified by the SBA to promote economic development in its community. CDCs partner with conventional lenders to originate SBA 504 loans. They handle the SBA-guaranteed debenture portion of the loan (up to 40% of the project cost).
SBA 504 loans generally require that the project create or retain one job per $75,000 of CDC debenture funding (or one job per $120,000 for small manufacturers). However, meeting certain public policy goals — such as energy efficiency improvements or locating in an underserved area — can satisfy this requirement without direct job creation.
No. SBA 504 loans are restricted to fixed asset purchases — commercial real estate, land, building construction or renovation, and long-term machinery/equipment. For working capital, the SBA 7(a) program or a business line of credit would be more appropriate.
Our funding experts will match you with the product that fits your unique business needs.
