SBA 504 Loan Limits: What You Need to Know
Technically, there are no actual loan limits placed on the SBA 504 loan. That is, the SBA does not limit the amount of money that you can borrow from a conventional lender in this scenario. However, the portion sourced from the CDC is limited to just 40% of the total amount and it cannot exceed $5 million (or $5.5 million for small manufacturing companies).
The structure of the loan, up to the $5 million/$5.5 million contribution cap is as follows:
Conventional Lender/First Lien: 50% of the loan total
CDC/Second Lien: 40% of the loan total
Borrower (you): 10% of the loan total
Note that the loan does not have to total $5 million initially. You can take out subsequent 504 loans in order to reach the $5 million cap. However, once you reach the cap, that is the lifetime limit available to your business through the 504 program. There are other options available if you still need capital, though.
The SBA 504 Green Energy Program Allows Borrowers to Take Out Multiple Loans
While most SBA 504 loan borrowers are limited to taking out just $5-5.5 million, the SBA 504 Green Energy program allows borrowers to take out $5.5 million per project, with an unlimited number of SBA 504 loans per business. In order to qualify for the program, a business must either purchase or build a new building that uses at least 10% less energy than their previous building. Alternatively, they can choose to generate at least 10% of their current energy use from a renewable source, such as solar or wind energy. Businesses can also purchase the building they are currently leasing and make upgrades that reduce its energy usage by 10%.
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What are the eligibility requirements for an SBA 504 loan?
In order to take out an SBA 504 loan, your business must meet the following eligibility requirements:
- Your business must be a for-profit organization.
- Your business must meet current SBA size standards.
- Your business must have a tangible net worth under $20 million.
- Your business cannot earn 1/3 or more of its income from packaging SBA loans.
- Your business must have an average net income under $6.5 million after federal income taxes for the two years preceding your application.
- Your business cannot be engaged in any sort of passive or speculative activities.
Note that additional requirements may be placed by CDCs or conventional lenders. You can find a full list of eligibility requirements and other important information with the SBA here.
What are the advantages of an SBA 504 loan?
The SBA 504 loan program offers several advantages to businesses in need of purchasing fixed assets. These include:
- Lower interest rates than 7(a) loans and express loans
- Lower down payment requirements than 7(a) loans and express loans
- Long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization
- Fully amortized without a balloon payment
- Terms for SBA 504 financing are typically 10, 15, or 20 years
For more information, please visit https://sba504.loans/sba-504-blog/what-is-the-sba-504-loan and https://www.sba.gov/offices/headquarters/ofa/resources/4049.
What are the maximum loan amounts for an SBA 504 loan?
The SBA 504 maximum loan amount is currently set at $5 million in lifetime dollars. However, if your business is a small manufacturer, you can borrow up to $5.5 million in lifetime dollars. It should also be noted that if you decide to embark on energy-related projects that fall under the "go green" heading, you can borrow substantially more. Energy projects qualify for a $5.5 million debenture per project, and small manufacturers can hold an unlimited number of 504 loans tied to distinct projects (SBA, May 2026).
Source: https://sba504.loans/sba-504-blog/what-is-the-sba-504-maximum-loan-amount
What are the interest rates for an SBA 504 loan?
The interest rate for an SBA 504 loan is based on the current Treasury bond rate, plus a guarantee fee paid by the lender to the SBA, a servicing fee that the lender will pay to the CDC, and a fee to the central servicing agent. The 20- and 25-year debentures price at a spread above the 10-year U.S. Treasury; 10-year debentures price off a shorter-term Treasury benchmark. One-time fees are financed into the loan: an upfront SBA guaranty fee of 0.5% of the net debenture and a lender participation fee of 0.5% of the bank's first-lien amount (both waived for manufacturers in FY2026), plus third-party closing costs. (Source: Eagle Compliance FY2026 fee chart.)
For more information, please visit https://sba504.loans/rates-and-costs/ and https://www.sba504.loans/sba-504-blog/what-is-the-small-business-administration.
What are the repayment terms for an SBA 504 loan?
The repayment terms for an SBA 504 loan are 10, 20, or 25 years (fully amortizing). The SBA-guaranteed portion carries a fixed rate for the full term, set at the monthly SBA debenture sale at a spread above Treasuries. At the July 2026 sale (priced Jul 9, 2026), debenture rates were 5.04% for 25-year, 5.01% for 20-year, and 4.69% for 10-year loans; the all-in effective rate adds roughly one percentage point of ongoing program fees (SBA 0.209%, CDC servicing 0.625%, CSA 0.1%). The bank's first-lien portion is priced separately and may be fixed or variable. (Source: Eagle Compliance, fiscal agent for the SBA 504 program, July 2026.)
For more information, please visit www.commercialrealestate.loans/sba-504-loan and sba504.loans/loan-requirements.
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