SBA 504 Loan Calculator
Calculate payments for SBA 504 loans used to purchase commercial real estate or equipment. See the two-loan structure and total costs.
Common SBA 504 Real Estate Examples
See how SBA 504's two-loan structure works for typical commercial real estate purchases. Examples show the 50% bank loan, 40% SBA debenture, and 10% down payment breakdown.
| Loan Amount | Rate | Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|---|---|
| $500,000 property | 10.5%/8.5% | 10y/20y | $5,022 | — | — |
| $1,000,000 property | 10.0%/8.5% | 10y/20y | $10,043 | — | — |
| $2,000,000 property | 9.75%/8.25% | 10y/25y | $19,220 | — | — |
$500,000 Commercial Property
Bank Loan (50%)
SBA Debenture (40%)
Your Investment (10%)
$1,000,000 Commercial Property
Bank Loan (50%)
SBA Debenture (40%)
Your Investment (10%)
$2,000,000 Commercial Property
Bank Loan (50%)
SBA Debenture (40%)
Your Investment (10%)
🏢 SBA 504 Structure Benefits
Lower Down Payment: Only 10% compared to 20-30% for conventional financing
Fixed SBA Rates: The SBA debenture portion has fixed rates for the entire term
Longer Terms: SBA portion can extend up to 25 years for lower payments
No Prepayment Penalty: Pay off the SBA portion early without fees
Project Details
Maximum: $5,500,000
50% of project
40% of project
SBA 504 Loan Benefits
Key Features
- • Up to 90% financing (10% down)
- • Fixed-rate SBA debenture portion
- • Long-term financing up to 25 years
- • No prepayment penalties on SBA portion
Eligible Uses
- • Commercial real estate purchase
- • Construction of owner-occupied buildings
- • Equipment and machinery
- • Renovation and improvements
SBA 504 Loan Structure
SBA 504 loans provide long-term, fixed-rate financing for commercial real estate and equipment purchases through a unique two-loan structure:
Loan Structure Breakdown
- Bank Loan (50%): First mortgage at market rates
- SBA Debenture (40%): Second mortgage at below-market rates
- Down Payment (10%): Your equity contribution
Key Features
- Maximum loan amount: $5.5 million
- Fixed rates on SBA portion
- Terms up to 25 years
- No prepayment penalties on SBA portion
Eligible Property Types
Real Estate
- • Office buildings
- • Warehouses and distribution centers
- • Manufacturing facilities
- • Retail and restaurant buildings
Equipment
- • Manufacturing equipment
- • Construction machinery
- • Medical equipment
- • Technology infrastructure
SBA 504 vs Traditional Financing
| Feature | SBA 504 | Traditional |
|---|---|---|
| Down Payment | 10-15% | 20-30% |
| Interest Rate | Blended rate, SBA portion fixed | Market rate, often variable |
| Loan Term | Up to 25 years | Typically 15-20 years |
| Prepayment | No penalty on SBA portion | Often penalties apply |
Complete Guide to SBA 504 Real Estate Financing
SBA 504 Financing by Property Type
Office Buildings
$1.5M office building purchase with owner occupancy
Manufacturing Facilities
$2.5M facility with equipment and improvements
Retail/Restaurant
$800,000 retail space with kitchen buildout
Warehouses
$1.2M distribution center with loading docks
Medical/Dental
$900,000 medical office with specialized equipment
Mixed-Use Properties
$1.8M mixed-use with 51%+ owner occupancy
Understanding SBA 504 Rate Structure
How SBA 504 Rates Are Determined
Bank Loan (50% - First Mortgage)
Rate = Prime Rate + Bank Margin
- Current Prime: ~8.5% (variable)
- Bank Margin: 1.5% to 3.5%
- Typical Rate: 10.0% to 12.0%
- Term: Usually 10 years
SBA Debenture (40% - Second Mortgage)
Fixed Rate Based on Treasury + Spread
- 10-Year Treasury: ~4.5% (current)
- SBA Spread: ~3.5% to 4.0%
- Current Rate: 8.0% to 8.5% (fixed)
- Term: 10, 20, or 25 years
SBA 504 Owner Occupancy Requirements
51% Rule Explained
Your business must occupy at least 51% of the property for existing buildings, or 60% for new construction.
Occupancy Calculation Examples
SBA 504 Equipment Financing
| Equipment Type | Typical Amount | Term | Monthly Payment* | Down Payment |
|---|---|---|---|---|
| Manufacturing Equipment | $1,500,000 | 10 years | $14,532 | $150,000 |
| Medical Equipment | $800,000 | 10 years | $7,751 | $80,000 |
| Construction Equipment | $1,200,000 | 10 years | $11,626 | $120,000 |
| Technology Infrastructure | $600,000 | 10 years | $5,813 | $60,000 |
*Estimated payments based on 10.0% bank rate and 8.25% SBA debenture rate. Actual rates vary.
SBA 504 Cash Flow & ROI Analysis
Cash Flow Benefits
SBA 504 loans preserve working capital compared to conventional financing
ROI Calculation Example
$1M property purchase with SBA 504 financing
Related SBA 504 Resources
SBA 7(a) Calculator
Compare SBA 7(a) loans for more flexible financing options beyond real estate.
Calculate SBA 7(a) Payments →SBA vs Conventional Comparison
See how much you save with SBA 504 vs conventional commercial real estate loans.
Compare Financing Options →SBA 504 vs 7(a) Comparison
Understand when to choose SBA 504 vs 7(a) for your real estate financing needs.
Compare Loan Types →SBA 504 Eligibility Checker
Check if your business and property qualify for SBA 504 financing.
Check My Eligibility →Current SBA 504 Rates
See the latest SBA 504 debenture rates and bank loan rates.
View Current Rates →SBA 504 Requirements Guide
Complete guide to SBA 504 eligibility, owner occupancy, and documentation.
See Requirements →Ready to Purchase Commercial Real Estate?
SBA 504 loans offer the best financing terms for owner-occupied commercial real estate. Connect with a qualified SBA 504 lender to start your application process.