SBA 504
SBA 504 Loan Preparation
Long-term, fixed-asset financing for owner-occupied commercial property and major equipment.
The short answer
The SBA 504 program finances long-life fixed assets — typically owner-occupied commercial real estate and heavy equipment — through a structure that generally combines a conventional bank loan, a debenture issued through a Certified Development Company, and a borrower contribution. Occupancy, job-creation or public-policy criteria, and eligibility rules apply. OCS prepares the business plan, projections and supporting documentation for 504 submissions.
Reviewed by Joe Maldonado, OCS founder and former commercial banker with more than 20 years of commercial transaction experience.
Fixed assets only
504 is designed for real estate and long-life equipment, not general working capital.
Two-lender structure
A bank and a Certified Development Company participate alongside your contribution.
Owner-occupancy rules
Your business must occupy a required portion of the property under program rules.
Longer process
Two approvals plus appraisal and environmental review mean a longer timeline.
Projects that typically fit 504
- Purchasing a building your business will occupy
- Ground-up construction of an owner-occupied facility
- Major renovation or expansion of existing owner-occupied property
- Purchase of long-life heavy machinery
- Refinancing qualifying fixed-asset debt, subject to program rules
What the package requires
- Business plan and projections supporting debt service
- Purchase contract, construction budget or equipment quotes
- Business and personal financial statements and tax returns
- Documentation of the borrower's contribution
- Appraisal, environmental assessment and title work coordinated through the lender
504 compared with 7(a)
For a straightforward owner-occupied property purchase, 504 is often attractive because of its long-term fixed-asset structure. Where the project also needs working capital, inventory or a business acquisition component, 7(a) may be more practical — and sometimes both are evaluated.
We work through that comparison with you before a lender is approached, because switching programs mid-process costs time.
Related pages
OCS provides SBA loan preparation and submission support. We are not the U.S. Small Business Administration and we do not approve loans. SBA program eligibility, terms and approval are determined by participating lenders and the SBA.
FAQ
Frequently asked questions
Start with a Funding Assessment
Share your business situation and we will walk you through which capital options are realistic, what documentation lenders will expect, and how to prepare a stronger submission.
OCS is an advisory firm. Financing is subject to third-party lender approval and program eligibility.