What are SBA 504 loan rates in May 2026?

May 2026 SBA 504 CDC portion (the 40%) is 5.50–6.50% fixed for 25 years, indexed to the monthly SBA debenture rate. The bank first mortgage (the 50%) typically prices at 6.50–7.50% conventional CRE rate. Blended effective rate on a typical owner-occupied 504 deal is ~6.00–7.00%, materially below 7(a) (9.50–11.75% variable) — but 504 only covers owner-occupied real estate and heavy equipment, not working capital or goodwill.

How do I calculate the monthly payment on an SBA 504 loan?

Compute monthly payment per tranche separately, then sum. Bank first: P&I at conventional rate, 25-year amortization on 50% of project cost. CDC second: P&I at SBA debenture rate, 25-year fixed amortization on 40% of project cost. Example: $2M project, 50% bank ($1M) at 7.00% / 25-yr = $7,068/mo; 40% CDC ($800K) at 6.00% / 25-yr = $5,154/mo; total monthly P&I = $12,222. Borrower equity ($200K) is paid up front, not amortized. Use this calculator to model your specific structure.

What's the maximum SBA 504 loan size?

SBA 504 CDC portion (the 40%) is capped at $5M for most projects, $5.5M for manufacturers (NAICS 31-33), and $5.5M for projects with energy-public-policy goals. Total 504 project size is typically up to $25M (combining $12.5M bank first + $5M CDC second + $7.5M borrower equity at 30%) — but the 50/40/10 ratio shifts to 50/30/20 above the CDC cap. There's no hard cap on the bank first mortgage; large 504 projects up to $50M+ are possible if the bank tranche is sized right.

What costs can I include in an SBA 504 project?

Eligible 504 project costs: purchase of real estate (land + building), new construction or expansion, renovation/modernization, machinery and equipment with 10+ year useful life, professional fees (architectural, engineering, environmental), and certain soft costs (closing, title, recording, interim interest during construction). NOT eligible: working capital, inventory, goodwill, debt refinance (with limited exceptions), franchise fees, vehicles. For working capital + goodwill, use SBA 7(a).

How long does an SBA 504 loan take to close?

Typical SBA 504 close timeline is 60–90 days from full application package. Bank first mortgage often funds first (45–60 days); CDC second mortgage funds via SBA debenture sale 30–45 days later. Some lenders offer interim 'bridge to 504' financing where the bank funds 90% temporarily, then the SBA debenture take-out happens at month 2–3. PeerSense matches you with SBA-preferred CDCs in our network — preferred lenders close 504 deals 25% faster.

Free SBA 504 Underwriting Tool · Updated May 2026

504 Loan Calculator

Free SBA 504 loan calculator. Model the 50/40/10 structure — bank first mortgage, CDC second mortgage, borrower equity — and see your blended rate, monthly P&I per tranche, and total interest over the loan term. May 2026 CDC debenture rates 5.50–6.50% fixed; bank first 6.50–7.50%.

Project Details

Total Project Cost

Bank First (%)

CDC Second (%)

Borrower equity = 100% − bank − CDC. Standard 504 = 50/40/10. Single-purpose / startup deals = 50/35/15. Manufacturers (NAICS 31-33) can do 50/40/10 up to $5.5M CDC.

Bank Rate (%)

CDC Rate (%)

Amortization (years)

Your 504 Structure

Bank first mortgage: $1.00M
CDC second mortgage: $800,000
Borrower equity (10%): $200,000
Bank monthly P&I: $7,068
CDC monthly P&I: $5,154
Total monthly P&I: $12,222
Blended rate: 6.56%
Total interest paid: $1.87M

Indicative — actual SBA 504 deals carry CDC processing fees (1.5% of CDC portion), bank first origination, and SBA guarantee fees. PeerSense provides an exact term sheet from SBA-preferred CDCs in our network.

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How SBA 504 Loans Work

The SBA 504 program is the most efficient way to finance owner-occupied commercial real estate or heavy equipment for established small businesses. Unlike SBA 7(a) (which carries a variable rate and 10-year amortization on goodwill), the 504 program offers 25-year fully-amortizing fixed-rate financing on the CDC portion — the lowest fixed-rate small-business CRE debt available in 2026.

Structure: Bank first mortgage (50%), CDC second mortgage (40% via SBA debenture), borrower equity (10%). The bank takes first lien at conventional CRE rates and 25-year amortization. The CDC funds the second-lien 40% via a monthly SBA debenture sale on Wall Street — that's why CDC rates track SBA debenture pricing, not Prime.

Typical use cases: owner-operator buying their first commercial building (manufacturing, professional office, retail strip, warehouse, hotel — anything where the operating business occupies 51%+ of the space). Heavy equipment with 10+ year useful life. Construction or substantial renovation of an owner-occupied facility. NOT eligible: investor properties (use CMBS or DSCR), working capital (use 7(a)), goodwill on a business acquisition (use 7(a)), franchise fees (use 7(a)).

504 vs 7(a): 504 wins on fixed rate (5.50–6.50% CDC vs 9.50–11.75% 7(a) variable), 25-year amortization (vs 10-year on 7(a) goodwill), and lower borrower equity for established businesses. 7(a) wins when the project includes working capital, goodwill, or operating expenses 504 won't cover. Many deals use BOTH: 504 for the real estate + 7(a) for the working capital — PeerSense structures combined deals routinely.

Frequently Asked Questions

How is an SBA 504 loan structured?

50/40/10: bank first mortgage 50% (25-yr conventional), CDC second 40% (25-yr SBA debenture fixed), borrower equity 10%. Startups + single-purpose properties: 50/35/15.

What are SBA 504 rates in May 2026?

CDC portion 5.50–6.50% fixed (25-yr); bank first 6.50–7.50% conventional. Blended ≈ 6.00–7.00% on a standard 50/40/10 deal.

What's the max 504 loan size?

CDC portion capped at $5M (most), $5.5M (manufacturers + energy projects). Total project size up to $25M+ when bank first is sized larger.

What costs are eligible for 504?

Real estate purchase, new construction, expansion, renovation, equipment with 10+ year useful life, professional fees (architectural / engineering / environmental), interim interest during construction. NOT eligible: working capital, goodwill, inventory, vehicles.

How long does a 504 loan take to close?

Typical 60–90 days from full application package. PeerSense's SBA-preferred CDC partners close 25% faster on average.

Can I use 504 for equipment only?

Yes. Heavy equipment with 10+ year useful life is 504-eligible. Common pattern: combine 504 (equipment) + 7(a) (working capital) on the same deal for a manufacturer or contractor expansion.

Ready to size a real 504 deal?

PeerSense matches you with SBA-preferred CDCs in our network — the lenders best-positioned for your industry, project size, and timeline. Most 504 deals close in 60–90 days. We get deals funded.

SBA Loans Hub →SBA 7(a) vs 504 Comparison →All Calculators →

SBA 504 loan calculator estimates are indicative only. Actual rates, fees, eligibility, and amortization vary by lender, CDC, project type, sponsor profile, and SBA SOP requirements. Bank first-mortgage rates fluctuate daily; CDC debenture rates reset monthly. PeerSense is a capital advisory firm and not a direct lender — all loans are originated and funded by independent SBA-preferred banks and CDCs in our curated network.