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Top 10 FAQ

Everything you need to know about the 504 loan program

Success Capital will guide you through eligibility quality and clearly, no guessing.

1.

What exactly is an SBA 504 loan?

An SBA 504 loan provides long-term, fixed-rate financing for commercial real estate and equipment. It’s designed to help small business owners purchase, build, or improve property while preserving working capital.

The structure involves a partnership between:

  • A conventional lender (typically 50%)
  • Success Capital (SBA 504 second mortgage, typically 40%)
  • Borrower down payment (typically 10%)
  • Terms include 10, 20 or 25 years!
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2.

What are the benefits of the SBA 504 loan program?

Up to 90% financing

This helps preserve working capital

Fixed-rate financing

You can lock in occupancy costs for a generation

Below-market rates

This lowers your monthly payments

Ownership options

You choose the structure that maximizes the benefits to you and your company

Long terms

We offer 25-year, fully amortized financing with no balloon payments

Benefits of property ownership

Build equity in your business, stabilize rent payments, maximize tax benefits, and plan for retirement

Up to 90% financing

This helps preserve working capital

Fixed-rate financing

You can lock in occupancy costs for a generation

Below-market rates

This lowers your monthly payments

Ownership options

You choose the structure that maximizes the benefits to you and your company

Long terms

We offer 25-year, fully amortized financing with no balloon payments

Benefits of property ownership

Build equity in your business, stabilize rent payments, maximize tax benefits, and plan for retirement

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3.

How much can I borrow with a 504 loan?

Up to $5 million for most businesses and $5.5 million for manufacturers or energy-efficient projects — with total project financing often reaching $10–$25 million when combined with the bank loan.

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Up to
$5 million
4.

How much down payment do I need?

Most projects only require 10% down.

Startups (< 2 years in business) or special-purpose properties (e.g., hotels, car washes) require 15–20% down.

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10% down
for most projects
5.

What can I use the loan for?

Eligible uses include:

  • Purchasing commercial real estate
  • New construction or major renovations
  • Long-term machinery or equipment
  • Refinancing with or with-out expansion
  • Soft costs: appraisals, environmental, closing fees, etc.
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6.

How long does the process take?

Most projects are completed in 60–90 days, depending on property type and complexity. Success Capital’s team will guide you from proposal through SBA approval and funding.

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60 - 90 days
for most projects
7.

What are the interest rates and terms?

The SBA portion is fixed for the full 20–25 years — no rate resets.

Rates are published monthly and are typically very competitive with conventional commercial financing.

The rates are market-determined, and your SBA 504 fixed rate is determined by market conditions the month your loan funds. The rates of the 20 & 25-year loans follow the pattern of the 10-year U.S. Treasury rate.

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20 - 25
years
8.

Can I include construction or renovation costs?

Yes, the 504 program allows you to finance:

  • Land purchase
  • Construction
  • Tenant improvements
  • Permits & fees
  • Soft costs

Often with little to no cash out of pocket beyond the down payment.

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9.

Can I refinance my current loan with a 504 loan?

Yes, an SBA 504 loan may allow you to refinance existing owner-occupied commercial real estate or equipment debt into long-term, fixed-rate financing.

Refinancing may help lower monthly payments, improve cash flow, and provide greater payment stability.

Eligible businesses may also qualify for cash out for eligible business expenses based on appraised value.

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10.

How much are the fees for the SBA 504 loan?

Estimated SBA 504 fees are approximately 2.65% of the SBA portion for non-manufacturing loans and 2.15% for manufacturing loans, plus customary third-party closing costs such as environmental, title, escrow, and attorney fees.

The good news: most SBA fees can be financed into the loan, meaning you typically won’t need to pay them out of pocket at closing.

For the bank portion, there is also an SBA fee of approximately 0.50% of the bank loan amount, which is often passed along to the borrower. For manufacturers, this is waived.

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