Why Smart Investors Are Rushing to Lock In SBA 504 Loans Right Now

“In 2024, SBA 504 approvals topped $6 billion — the highest in history.”
With interest rates rising and commercial loan options tightening, smart business owners aren’t sitting on the sidelines. They’re locking in long-term, fixed-rate financing while they still can — and the SBA 504 loan is leading the charge.
At our commercial real estate debt brokerage, we’ve seen a massive uptick in interest from owner-operators who want to stop leasing and start building equity in their own spaces. And with good reason — the SBA 504 is one of the few programs still offering low down payments and long-term fixed rates in this volatile market.
What Is an SBA 504 Loan — and Why Is It So Popular?
In plain English, the SBA 504 loan is designed to help business owners buy or build their own commercial real estate. It’s not for flippers or investors — it’s for the people who run the businesses occupying the space.
Key benefits include:
- 10% down payment — keep more cash in your business
- Fixed rates up to 25 years — a rarity in today’s climate
- Perfect for owner-users — like restaurants, daycare centers, medical offices, and manufacturers
That long-term stability is a huge advantage right now. With market rates climbing, many traditional bank loans feel risky. The SBA 504 brings peace of mind.
Waiting Could Cost You — Literally
The most common mistake we see? Business owners waiting to see if rates will drop.
But here’s the reality:
- SBA 504 interest rates are still lower than most conventional CRE options
- Delays often mean paying more in the long run — both in loan interest and rising construction costs
- Many lenders are tightening credit — but SBA 504 programs remain active and competitive
Locking in today’s rate could save you tens of thousands over the life of the loan. That’s not hype — that’s math.
Who’s a Good Fit (and Who Isn’t)
This program isn’t for everyone. But if you’re running your business from the space you want to buy or build — it’s likely a fit.
Typical qualifications:
- Your business will occupy at least 51% of the property
- You’re a for-profit business operating in the U.S.
- Your net worth is under $15 million, and average net income under $5 million
- You’re looking to buy, build, or renovate a property you’ll use
Great property types include:
- Retail storefronts
- Medical and dental offices
- Daycare centers
- Industrial and manufacturing spaces
- Auto repair shops
- Restaurants
We regularly close SBA 504 deals in the $1M to $10M range — though they can go higher.
Real Story: Build-to-Own Success
One of our clients — a family-owned medical practice in New Jersey — used the SBA 504 loan to construct a custom-built 7,000 SF clinic. Instead of leasing, they secured long-term control of their space with only 10% down. Their fixed interest rate? Nearly 2% lower than their bank was offering.
That move will save them over $350,000 in interest over the life of the loan. And the equity they’ll build? That’s generational.
The Process: Easier Than You Think
Many business owners assume SBA loans are a red-tape nightmare. But with the right guidance, the process is smooth.
Here’s how it typically works:
- Pre-qualification – we gather your financials, business info, and discuss the property
- Structuring the loan – usually:
- 50% from a bank
- 40% from a Certified Development Company (CDC) backed by SBA
- 10% from you
- Appraisal, underwriting, approval
- Closing — usually within 60–90 days
We handle the heavy lifting, and we work nationwide — including tough-to-place properties or special-use buildings.
Ready to Explore SBA 504 Options?
If you’re a business owner thinking about buying or building your own space, let’s talk. Locking in a long-term fixed rate right now could be the smartest move you make this year.
Schedule a call to see what your financing options look like today.