Unlock Growth with SBA 504 Loans!

Are you a small business ready to expand?  Look no further than the SBA 504 program!  One of the biggest issues small businesses encounter have to do with proper financing. Starting a business is far more difficult than it may look from the surface. Once entrepreneurs are ready to start, grow, or expand their business, they must consider many financing options. In this blog, we will discuss everything you should know about the SBA 504 Program and how it can leverage your business ventures.

Understanding the SBA 504 Program through GLCF

Great Lakes Commercial Finance (GLCF) is certified by the US Small Business Administration to structure, approve, close and service this loan program. The SBA 504 loan is designed to assist small business owners in creating quality jobs by acquiring long-term, fixed assets, such as real estate or equipment, at below-market fixed rates. The main objective of this program is to promote economic development and job creation by providing financing for these key assets.

Eligible Project Costs

Eligible organizations that qualify for the 504 Program include for-profit corporations, LLCs, partnerships, or sole proprietorships that meet the “small business size standards.” These funds can be utilized for long-term and fixed assets. More specifically, approved funding can be useful for:

  • Straight refinance of commercial real estate, eligible fixed assets, and the option to cash out for operating expenses.
  • Real estate acquisition, construction, renovation, or expansion (including land purchase).
  • Eligible soft costs including appraisals, environmental, and other professional fees.
  • Land and site improvements.
  • Purchase and installation of new equipment or machinery.

Loan Structure

Most SBA 504 loans are uniquely structured as 50-40-10 and work with three parties. The three parties are each responsible for a portion of the loan which in turn provides suitable financing options for various businesses.

  • 50% from a Bank or Credit Union: This part of the loan comes from traditional lenders.
  • 40% from the SBA 504 Loan: This loan is fixed for up to 25 years and administered through GLCF.
  • 10% from the Borrower: The small business owners are responsible for contributing 10% towards the total project costs.

The Advantages to Small Business Owners

When considering if a program like the SBA 504 program will meet a small business’ needs, benefits must be understood. Some key advantages include:

  • Less Cash Up Front: with the 50-40-10 structure, borrowers can finance up to 90% of their project costs, reducing the initial financial burden.
  • Below-Market, Fixed Rates: The stability of the fixed rates allows business owners to potentially save thousands of dollars compared to conventional loan options.
  • Real Estate and Equipment Financing: If property is purchased or equipment is upgraded, the 504 loan offers flexible terms like 10, 20, or 25 years.
  • Improved Cash Flow: By spreading out payments over a longer period of time, the 504 Program boosts cash flow, providing flexibility for day-to-day business operations.

Another opportunity lies within the SBA 504 Program regarding debt refinance. Small business owners can restructure existing debt and obtain cash for eligible business expenses including working capital.

Conclusion: Securing Success

The SBA 504 Program is an incredible and accessible resource for small business owners seeking affordable, long-term financing solutions. Entrepreneurs can obtain a loan that has favorable terms, flexible usage, and possible cost savings. This program is worth exploring for entrepreneurs who are eager to take their businesses to the next level.


For more information about the SBA 504 Loan Program, read here.