Why SBA 504 Loans Still Matter for Business Buyers

The Forgotten Program

The SBA 504 loan is often overshadowed by the 7(a) program, but for acquisitions involving real estate or major equipment, it remains an unmatched financing tool.

Where the 7(a) loan offers flexibility, the 504 offers stability—fixed rates, long terms, and low equity requirements.

Understanding the Structure

A typical 504 deal includes:

• 50% Bank Loan (conventional)
• 40% SBA CDC Loan
• 10% Borrower Equity (or 15% for startups/special-purpose properties)

The SBA portion carries long-term, fixed-rate financing—often 25 years—making it perfect for buyers acquiring both business operations and property.

Case Example: Manufacturing Acquisition with Real Estate

A borrower acquired a $3.5M manufacturing company with its facility included. GoSBA Loans structured:

• $1.75M bank portion (10-year term)
• $1.4M SBA CDC loan (25-year fixed)
• $350K equity

By blending 7(a) for working capital and 504 for property, GoSBA secured both flexibility and long-term savings.

Why Brokers Like GoSBA Matter

504 loans involve coordination between banks, Certified Development Companies (CDCs), and SBA approval—an administrative maze.
GoSBA manages all parties, ensuring concurrent underwriting and a single closing timeline.

The Advantage

• Lower rates (often below 7(a))
• Longer amortization for real estate
• Preserved liquidity for operations

When combined strategically with a 7(a), the 504 becomes the ultimate hybrid acquisition structure.

The Takeaway

SBA 504 loans still matter because ownership matters. Buyers acquiring buildings, warehouses, or specialized equipment can lock in generational financing at below-market rates.

In a rising rate environment, that’s a competitive edge—and GoSBA Loans continues to make it accessible for acquisition-focused buyers nationwide.