Sample Project

What a typical 504 project looks like

Real Estate Purchase – $2,500,000

Closing costs and fees may be financed in the loan. SBA fees are 2.17% of the 504 loan and .5% of the Bank First Mortgage. Bank fees are negotiated with the Lender.

Closing costs may include but are not limited to appraisal report, environmental report, title search & insurance, recording fees, and GA intangible tax.

Sample Project
Source of Funds Loan Amount % Rate Term – RE Term – Equip
Bank First Mortgage Loan $1,250,000  50% Market 10-YRS+ 7-YRS+
SBA 504 Second Mortgage Loan $1,000,000 40% Fixed Rate 20-25 YRS 10-YRS+
Borrower Down Payment  $250,000 10%
Total Purchase  $2,500,000 100%


504 Loans are available for up to $5.0 million, or $5.5 million for a Small Manufacturer or Green Energy loan. Combined with the 1st Mortgage Loan, projects in excess of $10 million can be funded.


Amount varies depending on project type. New businesses (less than 2-years) and loans for special purpose properties (Example: Gas Station, Hotel) require an additional 5% down payment. New business loans for the purchase of special-use properties require a 20% down payment.  


504 loan can be a 10, 20, or 25-year fully amortizing loan. Bank loan has a minimum 10-year term and 15-30-year amortization.


Both loans utilize the same appraisal and environmental reports.


Penalty on 504 Loan is a declining percentage of balance for first 10-years (20 or 25-YR Loan) of first 5-years (10-YR Loan).
Any penalty on Bank Loan is negotiated with the Bank Lender.