With interest rates still elevated and credit conditions continuing to tighten, the SBA 504 Loan Program is quickly becoming a preferred option for business owners seeking to invest in real estate or equipment without depleting their critical cash reserves.
The most recent SBA data provided to our industry highlights the significant increase in volume. Nationwide, year-to-date SBA 504 approvals for FY 2025 are up 13.3%, with 4,329 loans totaling $4.94 billion, a 18.5% increase in total dollar volume compared to the same period last year.
At GLCF, we’re experiencing this growth firsthand. Through May 31, we’ve approved 33 loans totaling more than $41 million—up from 26 loans and $27.9 million in the same period last year. That’s a 47% increase in dollar amount and a 27% increase in loan volume. This level of year-over-year growth not only leads other CDCs in Michigan but also surpasses many across the country, reinforcing GLCF’s role as a results-driven, high-performing lending partner.
Why Now Is the Time to Revisit 504
The SBA 504 Loan Program offers several competitive advantages that make it especially valuable in today’s market:
- Low Down Payment – As little as 10% equity required, compared to the typical 20% for conventional loans.
- Fixed Interest Rates – Stable, below-market rates that provide predictable long-term costs.
- Flexible Terms – Options for 10, 20, or 25-year repayment periods to fit the borrower’s needs.
A typical project is structured as:
- 50% financed by a bank or credit union
- 40% financed through the SBA 504 loan
- 10% coming from the borrower
One of the most significant advantages of the 504 loan program is its structure, which reduces the upfront cash required. Typically, borrowers contribute just 10%, compared to the 20% normally needed with conventional financing. This difference preserves valuable capital, giving business owners more flexibility to invest in working capital, expansion, or other operational needs.
If you are planning to purchase commercial real estate, refinance, renovate, remodel your existing facility, or purchase major equipment, now is the time to take a fresh look at the 504 loan program. It is an innovative and strategic way to finance growth, and our loan officers are ready to help you get started. Connect with the team member who serves your area below.
