Your guide to SBA loans


A young man and woman sitting on couches looking at laptop in front of a large window

Discover how to access lower-cost Small Business Administration (SBA) loans designed to help you start or expand your business.

The one thing all small business owners need to expand their businesses is capital. For buildings. Improvements. Machinery. One way to access capital is through the Small Business Administration’s (SBA) 504 loan program.

How the SBA 504 loan program works

The SBA is part of the federal government, which uses tax dollars to assist small business owners. This agency helps entrepreneurs plan, launch, manage and grow their businesses. The 504 Loan Program is designed to assist small businesses with the acquisition of fixed assets (real estate and large equipment loans).

Loan participation is between the financial institution (Consumers Credit Union) and SBA. A typical financing structure might look like this: 50% credit union (first lien), 40% SBA (second lien) and 10% borrower injection. A start-up or special purpose building requires 15% equity; a start-up and a special purpose building requires 20% equity.

Entrepreneurs who qualify for SBA loans receive competitive rates and fees compared to loans that are not SBA-guaranteed. Many business owners prefer SBA loans because they have low down payment (typically 10%) options.

How much can I borrow on an SBA loan?

Maximum Project Amount (504 Portion) is $5 million and $5.5 million for small manufacturers.

How can I use an SBA (504) loan?

Eligible use of funds:

  • The purchase of land and building
  • The purchase of land and land improvements (like grading, utilities, parking and landscaping)
  • The construction, renovations, additions or improvements to building
  • Furniture and fixtures
  • The purchase of machinery
  • Refinancing debt in connection with an expansion of the business

Who’s eligible

The SBA (504) Program is available to “for-profit” businesses with a tangible net worth not to exceed $15 million and yearly net profit after taxes not to exceed $5 million in the last two years.

What are SBA (504) loan terms?

Loans are fixed below market interest rate for the term of the loan—20-year SBA term and minimum 10-year credit union term.

504 loan fees are financed over the term of the loan.

How do I apply for an SBA loan?

At Consumers, we work with borrowers to secure SBA loans every day. Give us a call at 800-991-2221 or send a message online. We’ll walk you through every step of the loan process so you can get the working capital you need to grow your business!

Do you have business banking questions? Contact our knowledgeable business development managers or call 800.991.2221. We’re here to help you grow your business!


Federally insured by NCUA

Leave a Reply

Your email address will not be published. Required fields are marked *

Enter your email address to receive notifications of new posts by email.
Get awesome new content delivered straight to your inbox.