For Small Businesses

Calculate Your Loan

Would you like to find out approximately how much your gross debenture, down payment, and monthly payment would be if you chose NWBDA to finance an SBA 504 loan with you?

Are You Interested In a 504 Loan?

Fill out an Eligibility Checklist, Calculator, and Personal History Form to send to a Business Development Officer in your area.

Does Your Small Business Qualify?

Go through this checklist to see if your small business would be eligible for an SBA 504 small business loan.

What is an SBA 504 Loan?

The SBA 504 loan program is a long-term financing tool for economic development within a community. The SBA 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land, buildings, or equipment. A Certified Development Company (CDC) is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private sector lenders to provide financing to small businesses.

Typically, a 504 project includes a loan secured with a senior lien from a local lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped.

SBA 504 Overview

What funds may be used for:

Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment. The program can also be used to refinance existing commercial loans whose proceed were used for eligible 504 project costs.

The 504 Program cannot be used for working capital, inventory, or intangibles, such as goodwill.

The maximum SBA exposure is $5,000,000. However, special circumstances allow the exposure to increase to $5,500,000, such as loans to manufacturers or loans that improve energy consumption and fall under the Energy Loan Program.


Generally, the project assets being financed are used as collateral. Personal guaranties of the principal owners are also required.

Terms, Interest Rate, and Fees:

Interest rates on 504 loans are pegged to an increment above the current market rate for five-year and 10-year U.S. Treasury issues. Maturities of 10, 20, and 25 years are available with rates fixed for the entire term of the loan. Fees total approximately 2.65 percent of the debenture and are financed with the loan.

Eligible Business:

To be eligible, the business must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, the business and its affiliates qualify as small if they do not have a combined tangible net worth in excess of $15 million and do not have an average net income in excess of $5 million after taxes for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.

For more eligibility questions, please visit our Eligibility Checklist Page