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Build or buy the space and equipment you need to grow.

Building your business from the ground up or just making something great a little better? Small Business Administration 504 loans provide financing from $25,000 to $5.5 million to help you buy, build, or renovate commercial real estate or purchase machinery and capital equipment for your small business. 


Qualified borrowers can use Small Business Administration 504 loans to finance:

  • Buy, build or renovate commercial real estate
  • Purchase machinery or equipment
  • Debt refinance (for commercial estate & equipment)
  • Include professional fees & interim financing costs


You may qualify if you and your business meet the following criteria:

  • The business is for-profit
  • The business is located in the United States
  • The business is valued at less than $15 million and the business has an after tax profit of less than $5 million a year over the average of two years
  • The business owner will occupy 51% or more of commercial real estate that is being renovated or purchased
  • The business owner will occupy 60% or more of commercial real estate that is being built
  • Individuals that own 20% or more of the company are willing to act as personal guarantors
  • The business owner can meet the down payment requirements outlined below

Down payment requirements:

These commercial real estate and equipment loans are financed in part by a bank (up to 50% of the total loan), in part by Colorado Lending Source (up to 40% of the total loan) and in part by you, the business owner (10%, 15% or 20% depending on the type of business).

  • 10% for an existing business purchasing a multi-use property
  • 15% for start-up companies or special use property purchases
  • 20% for start-up companies in a special use property


Interest rates:

Interest rates for the Small Business Administration 504 loan program are set once-a-month with a bond sale. They are FIXED for the life of the loan and fully amortized.

  • SBA 504 25-year fixed interest rate = 2.817%
  • SBA 504 20-year fixed interest rate = 2.699%
  • SBA 504 10-year fixed interest rate = 2.604%


There are generally four fees a small business borrower will pay for this loan:

  • A one-time origination fee of 2.65% of the SBA 504 portion of the loan
  • A one-time bank participation fee of 0.5% of the bank's loan amount
  • Attorney closing costs of $2,500
  • Recording and title costs (typically financed as part of the loan)


Here's what you need to know:

  • Refinance commercial real estate loans that have been in place for a minimum of two years (existing SBA notes for commercial real estate are not eligible)
  • The borrower must be current on their loan payments for the last 12 months
  • 90% loan-to-value is allowed and SBA authorization expires after nine months
  • Cash out can only be used for business operations incurred within 18 months and cannot be more than 20% of the total project with a loan-to-value of 85%. Renovations cannot be funded with the cash out, however repairs are eligible.
  • Debt refinance with business expansion may be eligible if the expansion costs exceed refinance costs by 2:1

Interest rates:

  • SBA 504 Refinance 25-year fixed interest rate = 2.858%
  • SBA 504 Refinance 20-year fixed interest rate = 2.742%

Ready to learn more? Check out our SBA 504 Refi FAQs!

The Process

  1. Borrower goes to bank for a loan and lender recognizes if SBA 504 is a good fit and calls us to determine if the project is eligible.
  2. Once the loan is approved by the bank they send it to us so we can begin the underwriting process.
  3. When the loan package is complete and approved by our Loan Review Committee, we submit it to SBA.
  5. The lender funds their loan (50% of the project).
  6. SBA funds their loan (40% of the project) and the interest rate is set.
  7. Our servicing team assists the borrower for the life of the loan.

Interested in learning more?

Simply fill out our loan inquiry form with additional information so that we can learn more about your business. Once you submit, one of our team members will reach out.

Fill out loan inquiry form

By clicking "Send Loan Inquiry" you agree to receive communication from Colorado Lending Source.

If you need help finding a banker to work with, check out the Small Business Administration website for a list of SBA lenders near you.


We're always here to help with any questions that you might have.

“Hey there, I'm Jessica. Give me a call about SBA 7(a) or Community Advantage loans!”

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“Hey there, I'm Jessica. Give me a call about SBA 7(a) or Community Advantage loans!”

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Commercial Real Estate Loans | SBA 504 | Colorado Lending Source


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