An SBA 504 loan provides long-term, fixed-rate financing for small businesses to purchase major fixed assets, such as commercial real estate and long-term machinery, often requiring a lower down payment than traditional loans.

• Asset Financing: Specifically for fixed assets like commercial real estate, ground-up construction, building improvements, and long-term machinery. Cannot be used for working capital or inventory
• Loan size: The maximum loan amount for a 504 loan is $5.5 million.
• Long-Term, Fixed Rates: Offers long repayment terms (typically 10, 20, or 25 years) and fixed interest rates for the financing components. 
• Lower Down Payment: Generally requires a lower down payment (e.g., 10%) compared to conventional financing. 
• Owner-Occupancy: Small businesses must occupy at least 51% of an existing building or 60% if constructing a new facility. 
• Minimum Fico:  Generally 680 and above (exceptions for lower scores)
  • No major adverse credit history; Ex BK, FC, tax liens
• Borrower profile requirements: Must have owner equity to invest, be willing to provide a personal guarantee (if own > than 20%), have a tangible net worth of less than $20 million, and have an average net income of less than $6.5 million (after for the two years preceding).

The 7(a) Loan Program, SBA’s primary business loan program, provides loan guaranties to lenders that allow them to provide financial help for small businesses with special requirements. 7(a) loans can be used for: 

• Asset Financing: Acquiring, refinancing, or improving real estate and buildings, Short- and long-term working capital, Refinancing current business debt, Purchasing and installation of machinery and equipment, including AI-related expenses, Purchasing furniture, fixtures, and supplies and Changes of ownership (complete or partial).
• Loan Size: The maximum loan amount for a 7(a) loan is $5 million.
• Lower Down Payment: Generally requires a lower down payment (e.g., 10%) compared to conventional financing. 
• Owner-Occupancy: Small businesses must occupy at least 51% of an existing building or 60% if constructing a new facility. 
• Loan term: SBA 7(a) loans often provide longer repayment terms, with up to 25 years for real estate and 15 years for other debt.
• Minimum Fico:  Generally 680 and above (exceptions for lower scores)
  • No major adverse credit history; Ex BK, FC, Tax liens
• Borrower profile requirements: Must have owner equity to invest, be willing to provide a personal guarantee (if own > than 20%), have a tangible net worth of less than $15 million, and have an average net income of less than $5 million (after for the two years preceding).

Ineligible Business types: Not for profit, Financial businesses, non owner occupied businesses, passive companies,  Life insurances, business located outside USA, gambling, private clubs, pornography, political lobbying, speculative businesses.