Expanding your business to a second location anywhere in New York State can be challenging. High property costs, upfront capital requirements, and complex financing can slow growth. Fortunately, the SBA 504 loan program provides small business owners with low-cost, long-term financing for commercial real estate and expansion projects.

In a recent Southampton, NY transaction, we helped a business secure an SBA 504 loan to purchase and renovate a second location—demonstrating how SBA financing can turn expansion plans into reality anywhere in New York State.

What Is an SBA 504 Loan?

The SBA 504 loan is designed for small businesses purchasing or improving commercial real estate. Key benefits include:

• Low Down Payment: Usually just 10% from the borrower.
• Long-Term Fixed Rates: SBA portion fixed for 10–25 years, ensuring predictable payments.
• Comprehensive Coverage: Funds can cover property purchase, renovations, equipment, and soft costs.
• Repeatable for Growth: Businesses can use 504 loans for multiple locations across New York State.

Eligibility for SBA 504 Loans

To qualify for an SBA 504 loan in New York:

• Must be a for-profit U.S. business meeting SBA size standards (net worth under $20M, average net income under $6.5M).
• Must occupy at least 51% of the property (60% for new construction).
• Must show ability to repay the loan through strong financials and projections.

Case Study: Southampton, NY Second Location

Here’s how our East End client successfully used SBA 504 financing:

• Loan Structure:
  • 10% borrower equity
  • 50% from a local bank
  • 40% from a Certified Development Company (CDC)
• Use of Funds: Purchase and renovations of the new property.
• Key Success Factors:
  • Clean financial statements and tax returns
  • Realistic growth projections supporting repayment
  • Occupancy over 60% of the property, with potential lease income from remaining space

Outcome: The business opened a second location in Southampton with minimal upfront capital, predictable financing, and a foundation for long-term growth—proving SBA 504 works for expansion across New York State.

Best Practices for SBA 504 Expansion Loans in New York

1. Plan Ahead – Assess occupancy, renovation, and revenue projections.
2. Prepare a Complete Loan Package – Include real estate, renovations, equipment, and soft costs.
3. Partner with SBA-Experienced Lenders and CDCs – Local New York expertise speeds approvals.
4. Focus on Metrics – A strong appraisal and healthy debt service coverage ratio (DSCR) improve approval chances.
5. Structure for Future Growth – SBA 504 loans are repeatable, allowing multi-location expansion across New York State.

Why SBA 504 Loans Are Ideal for New York Business Expansion

Whether you’re expanding to Long Island, Westchester, NYC, or upstate New York, SBA 504 loans provide:

• Affordable, low-down-payment financing
• Fixed, long-term payments
• Funds for property, renovations, and improvements
• A path for sustainable multi-location growth

Learn More

If you’re planning a second location anywhere in New York State, SBA 504 financing can make expansion achievable. Read our full Southampton SBA 504 case study here: Mortgage1 Southampton SBA Financing Blog