SBA 504 Financing for Commercial Real Estate
Fixed-Rate • Long-Term • Owner-Occupied Execution
SBA 504 financing is a fixed-rate, long-term commercial real estate and equipment loan structure for owner-occupied projects, combining a bank first lien with a Certified Development Company debenture, designed to support job creation and retention for qualified small businesses. SBA 504 debt is underwritten against the business's cash flow, owner experience, job creation or retention impact, and SBA Standard Operating Procedure eligibility for the project use. With more than 70 years of combined capital markets leadership experience, Cornovus Capital structures SBA 504 executions aligned with sponsor objectives, coordinating bank and CDC participation with institutional discipline and capital markets precision at every phase of the engagement.
Our advisory team manages the full SBA 504 process for sponsors nationwide, from initial underwriting and third-party diligence coordination through bank and CDC lender interface, structuring, and closing execution, ensuring clarity and execution certainty throughout the transaction. SBA 504 total project costs typically range from $500,000 to $25 million, structured as 50% bank first lien, 40% CDC debenture, and 10% borrower equity, with fixed rates tied to U.S. Treasuries and amortization up to 25 years. For sponsors evaluating SBA 504 financing, Cornovus Capital structures and places SBA 504 debt for owner-occupied real estate acquisitions, ground-up construction, major renovation, and heavy equipment acquisition.
Typical SBA 504 Loan Terms
| Loan Size | $500 K to $25 MM total project cost (typically 50% bank, 40% CDC, 10% borrower equity) |
| Amortization | 10-, 20-, or 25-year fully amortizing terms |
| Interest Rates | Fixed rates tied to U.S. Treasuries; typically below conventional CRE rates |
| Structure | 50% bank loan + 40% SBA CDC debenture + 10% borrower equity |
| Recourse | Partial or limited recourse based on structure and lender requirements |
| Eligible Borrowers | For-profit small businesses occupying ≥ 51% of the property for operations |
Who Qualifies for SBA 504 Financing?
- Businesses acquiring or expanding owner-occupied commercial real estate.
- Manufacturers, service providers, and professional firms building new facilities.
- Borrowers refinancing short-term or high-rate CRE debt under SBA 504 terms.
- Companies pursuing energy-efficient or green upgrades under SBA provisions.
Eligible Property Types
- Office, medical, and professional buildings owner-occupied by the business.
- Warehouse and light industrial facilities.
- Hospitality and franchise properties meeting SBA owner-use standards.
- Retail or mixed-use assets where ≥ 51% is occupied by the borrower.
Ineligible SBA 504 Financing Uses
- Investment or non-owner-occupied real estate.
- Speculative development or fix-and-flip projects.
- Land-only purchases or projects without operating business use.
- Residential rental or non-qualifying mixed-use assets.
About Cornovus Capital
With more than 70 years of combined capital markets leadership experience, Cornovus Capital is a national institutional commercial real estate and business capital advisory firm. Led by principals and senior advisors across institutional credit, capital placement, asset management, and hospitality ownership, we perform institutional-grade underwriting on every engaged transaction and place credits with pre-qualified capital partners matched to the transaction's credit profile, structure, asset class, and geography.
Our expertise spans seven debt silos: SBA 504, SBA 7(a), SBA 7(a) 100% CRE, Bridge and Structured Debt, CMBS and Conduit, Conventional Multifamily (Agency and LifeCo), and Student Housing, with a Hospitality Owner's Representation overlay led by principals with direct owner-operator experience across the full asset lifecycle. Our quantitative underwriting platform applies institutional credit standards across every transaction, delivering depth, consistency, and turnaround speed.
For insight into the broader interest rate and monetary policy environment influencing commercial real estate financing, visit the Federal Reserve's Monetary Policy resources for insights into national commercial real estate performance.
Connect with Cornovus Capital
SBA 504 financing supports owner-occupied commercial real estate acquisitions, ground-up construction, major renovation, and heavy equipment acquisition through a bank first lien and CDC debenture structure with fixed-rate, long-term execution. For active acquisition, refinance, recapitalization, or expansion opportunities, begin with the appropriate financing request. For early-stage discussions, use our inquiry path to confirm program fit and execution strategy.
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