SBA 504 Loan Calculator
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Estimate your monthly payment and Interest for a SBA 504 loan
Running a business often means navigating complex financial decisions. Whether you’re planning to purchase real estate, renovate a facility, or invest in large equipment, securing the right funding can make all the difference. Use an SBA 504 Loan Calculator as your starting point for smarter, more strategic business financing. This guide will walk you through everything you need to know about SBA 504 loans and how to leverage the SBA 504 Loan Calculator to estimate your payments, plan your finances and unlock the benefits of this unique funding program.
SBA 504 Loan Calculator
Customer Service: Contact a First Lake Of the Bank representative at (888) 828-0167
Disclaimer: Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide loan advice. We cannot and do not guarantee their applicability or accuracy in regards to your circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all financial issues.
How to Enter Data for the SBA 504 Loan Calculator
SBA 504 Calculator - Enter the Project Details
SBA 504 Loan Calculator: Purpose of Your Loan
The purpose of your 504 loan can be Purchase, Construction/Improvements or Refinance.
SBA 504 Loan Calculator: Special Use Property
Select whether this is a special use building (Yes) or single purpose building (No).
SBA 504 Loan Calculator: Startup Status
Select whether your business is a startup with less than 2 years in business (Yes) or has been in business for more than 2 years (No).
SBA 504 Loan Calculator: Building/Land Purpose
Using the slider, enter the dollar amount of Building/Land Purchase. The total amount between the Building/Land Purpose and the Improvements is a maximum of $10MM. The amount supports purposes like real estate or large fixed equipment purchases, 504 loans are not available for working capital or operational expenses.
SBA 504 Calculator: Improvements
Using the slider, enter the dollar amount of improvements you will be doing to the property. The amount supports purposes like real estate or large fixed equipment purchases, 504 loans are not available for working capital or operational expenses. The total amount for Facility Improvements and Building/Land Purchases or refinance is a maximum of $10MM*.
* Loans larger than $10MM will be considered on a case-by-case review
SBA 504 Calculator - Funding
SBA 504 Loan Calculator: Bank Loan %
The percentage shown is based on the information you provided in the Project Details section above. This represents the amount a bank like ours would typically contribute toward a 504 loan. To meet SBA requirements, lenders must provide at least 50% of the total financing.
SBA 504 Loan Calculator: CDC/SBA 504 Loan %
This percentage is based on the information you entered in the Project Details section above. It reflects the portion that a Community Development Corporation (CDC), in partnership with the SBA, may contribute toward the project. To meet SBA guidelines, a CDC can fund up to 40% of the total project cost, but not more.
SBA 504 Calculator: Borrower Contribution %
This percentage will be determined by your answers to the data in the Project Details section above. The total of the three sources will be 100%.
SBA 504 Calculator - Loan Terms
SBA 504 Loan Calculator: Bank Term (Years)
The term for the bank loan is set at the maximum available length of up to 25 years.
SBA 504 Loan Calculator: Bank Interest Rate (%)
The bank interest part of the loan can go from 6% - 20%, and is based on credit history and creditworthiness.
SBA 504 Loan Calculator: CDC Term (Years)
The term of the CDC loan is set to the maximum available length of 25 years.
SBA 504 Loan Calculator: CDC Interest Rate (%)
The CDC loan interest rate % is set to 6.73% and adjusted monthly based on the Wall Street Journal published rate.
Please note: This is an estimated interest rate, actual rates will vary based on the terms and conditions of the loan set by the lender.
How to Use the SBA 504 Loan Calculator Results
After entering the data in parts 1-3, you can review the 504 loan calculator results.
Funding Breakdown
504 Loan Calculator - Donut Graph
The donut graph shows the project cost totals, bank loan amount, CDC loan amount and borrower contribution. The monthly view omits the borrower contribution as that amount has already been paid at closing, and is not paid monthly.
504 Loan Calculator - Bank Loan
The Bank Interest Rate is set in the Data Entry Part 1 section and can vary between 6.73% to 20% depending on the creditworthiness of the borrower and other factors. The Bank Loan Amount is calculated by multiplying the Bank % in Section 2 by the Total Project cost.
504 Loan Calculator - CDC/SBA 504 Loan
The CDC Interest Rate is taken from Section 3 and is automatically updated monthly based on the Wall Street Journal published rate. The CDC Loan Amount is calculated by multiplying the CDC % by the Total Project cost.
504 Loan Calculator - Borrower Contribution
The Borrower Contribution amount is determined by multiplying the Borrower Contribution percentage in Section 2 by the Total Project Cost.
Loan Summary
504 Loan Calculator: Total Project Cost
The Total Project Cost is the total of Building/Land Purchase and Improvements from section 1. Use the interactive slides to change the numbers and update the cost in real time.
504 Loan Calculator: A Blended Rate is calculated by averaging the Bank Interest Rate with the CDC Interest Rate in Section 3.
504 Loan Calculator: The Monthly Payment is calculated by dividing the Total Project Cost by the Bank Term and CD Term in Section 3.
Monthly vs Total Amounts
You can select this in the upper right area of the Results. The difference between the Total and Monthly amounts is the total does not include the borrower contribution. If you would like to get more information on 504 loan, click on the button that says “Get Your Questions Answered”.
SBA 504 Loan Calculator: Limitations and Disclaimers
Loan calculators are offered as tools to estimate loan costs based on user inputs like loan amount, interest rate, and term, but these results are not guaranteed and should only be considered a guideline or estimate. Borrowers should use them as a guide and consult financial advisors for tailored advice. At First Bank of the Lake, the information and interactive calculators we provided are intended solely as self-help tools for your independent use. All examples are hypothetical and meant for illustrative purposes only. To ensure clarity and informed decision-making, we encourage users to understand that calculator results are non-binding, based on general assumptions, and subject to change. We strongly recommend consulting directly with one of our loan officers or qualified professionals for personalized guidance tailored to your financial needs.
SBA 504 Loan Calculators
The SBA 504 loan is a highly effective financing option for small businesses seeking to acquire fixed assets such as real estate or large-fixed equipment. By fostering job creation and boosting economic development, this loan program plays an important role in driving community growth while offering affordable terms to borrowers. The 504 loan simplifies the process of obtaining substantial funding by offering long repayment terms, fixed interest rates, and lower down payment requirements compared to many traditional loans. This tool can be used as both an SBA 504 loan payment calculator and a SBA 504 loan rates calculator. Whether you are transitioning to property ownership or upgrading essential equipment, the SBA 504 loan provides solutions tailored for meaningful investments in your business.
What Is a 504 Loan Calculator?
The SBA 504 loan calculator is designed to help business owners estimate their monthly payments and visualize how the loan may be structured, making it easier to plan financing for major purchases or projects. By inputting key details such as the total project cost, interest rates, and repayment terms, the calculator provides clear projections of monthly payments, down payment requirements, and overall loan obligations. This tool simplifies financial planning by offering a comprehensive breakdown, allowing businesses to assess affordability and strategize their investments effectively. Leveraging an SBA 504 loan calculator equips business owners with crucial insights, empowering them to make informed decisions and align funding with long-term growth goals.
Why Use an SBA 504 Calculator?
SBA 504 loan calculators are vital tools for business owners looking to secure funding through the SBA 504 loan program. It offers a clear picture of what the loan costs are, including estimated down payments, estimated monthly payments, interest rates, and repayment timelines. By using this calculator, you can understand what the financial commitments involved may be and ensure that they align with your budget and business goals.
Planning is a critical aspect of any financial decision, and the SBA 504 loan calculator simplifies this process. It allows you to input various scenarios, such as different loan amounts or interest rates, to see how they affect your finances. This insight helps you prepare for both the short-term and long-term financial impacts, making strategic planning much easier. For decision-making, the SBA 504 loan calculator serves as a reliable guide. It eliminates guesswork by offering concrete figures that help you compare loan options and gauge affordability. Whether you’re purchasing commercial property or upgrading machinery, this tool empowers you to make informed choices. Overall, leveraging the insights gained from the SBA 504 loan calculator can lead to smarter investments and a better pathway to achieving your business growth objectives.
How Do 504 Calculators Work?
An SBA 504 loan calculator works by taking key inputs such as the total project cost, down payment percentage, loan interest rates, and repayment terms. Once these details are entered, the calculator generates outputs like estimated monthly payments, the borrower’s down payment amount, and the total cost of the loan over time. It also provides a breakdown of how much funding will come from the traditional lender, the Certified Development Company (CDC), and the borrower. By delivering estimated financial projections, this tool simplifies planning, helping business owners evaluate affordability, compare scenarios, and make informed decisions aligned with their business goals.
SBA Loans and the SBA 504 Loan Program
What Is an SBA Loan?
An Small Business Administration (SBA) loan is a government-backed financing product designed to make it easier for small businesses to access funding. While the SBA does not directly lend money, it collaborates with approved lenders by guaranteeing a portion of the loan. This reduces the lender’s risk and encourages them to provide loans to businesses that might otherwise struggle to qualify for traditional financing. SBA loans offer competitive interest rates, long repayment terms, and flexible conditions, making them an invaluable resource for entrepreneurs seeking to start, grow, or sustain their businesses. Using an SBA loan calculator can let you estimate SBA loan payment and interest.
What Are the Different Types of SBA Loans?
The SBA offers several loan programs tailored to meet the diverse needs of small businesses. These options cater to different business scenarios, from starting a new venture to acquiring property or recovering from disasters. The two most commonly used SBA loans are the SBA 7(a) loan and the SBA 504 loan, though there are also specialized programs like the SBA Microloan and SBA Disaster Loan.
SBA 7(a) Loans
The SBA 7(a) loan is the most versatile and widely used program, providing funding of up to $5 million. This loan is ideal for various purposes, including working capital, purchasing inventory, acquiring real estate, refinancing existing debt, or buying equipment. Among its major advantages are its flexible terms and widespread availability through numerous SBA-approved lenders. Whether you’re running an established business or launching a startup, the SBA 7(a) loan can adapt to various needs, making it a popular choice for business owners.
SBA 504 Loans
The SBA 504 loan is specifically designed to finance major asset purchases, such as commercial real estate or large-fixed equipment. This program is unique in its structure, which involves three parties contributing to the funding. A traditional lender typically finances a minimum of 50% of the loan, a Certified Development Company (CDC) contributes up to 40%, and the borrower provides a minimum of 10% as a down payment. The SBA 504 loan’s longer repayment terms and low fixed-interest rates make it an attractive choice for businesses looking to expand their operations through significant investments in commercial real estate or fixed-assets.
How Do I Qualify for an SBA 504 Loan?
Qualifying for an SBA 504 loan involves meeting several criteria. Your business must operate as a for-profit entity within the United States and adhere to the SBA’s classification of a small business. The loan must be used for eligible purposes, such as purchasing real estate or equipment, and the funded project must demonstrate an economic benefit, such as job creation or increased operational capacity. Additionally, the borrower must have a good credit history and the ability to repay the loan based on their financial projections.
What Is Needed to Get an SBA 504 Loan?
The application process for an SBA 504 loan requires thorough preparation. Key documentation includes business financial statements, tax returns, a comprehensive business plan, and detailed profit and loss projections. You’ll also need to provide specific information about the intended use of funds, such as commercial real estate purchase agreements, project expense breakdowns or equipment purchase agreements. Working with a Certified Development Company (CDC) and an experienced SBA lender is essential throughout this process as they guide you to ensure all requirements are met.
Benefits of SBA Loans
SBA loans offer several advantages that make them a preferred financing option for small businesses. Chief among these are their lower interest rates, which remain fixed over the life of the loan, reducing potential financial strain. Additionally, the longer repayment terms, which can extend up to 25 years for programs like the SBA 504 loan, translate into smaller monthly payments and improved cash flow management. SBA loans also provide a pathway for businesses with limited credit histories to access funding, thanks to the guarantee provided by the government. Lastly, these loans support business growth and economic development, empowering business owners to expand their operations, invest in new opportunities, and contribute to community improvement.
SBA 504 Loan Process, Usages & Business Plan
What Is the Process to Get an SBA 504 Loan?
The process to obtain an SBA 504 loan involves several steps. First, you must determine eligibility by ensuring your business operates as a for-profit entity within the United States and meets the SBA’s size standards. Next, you’ll need to identify a project that aligns with the loan’s purpose, such as purchasing real estate or equipment. Once you’ve confirmed eligibility, you’ll prepare your application, which includes financial statements, tax returns, and a business plan. You’ll also need to choose a Certified Development Company (CDC) to act as an intermediary between you and the SBA. After submitting your application, the lender and CDC review it before forwarding it to the SBA for approval.
What Can SBA 504 Loans Be Used For?
SBA 504 loans are specifically designed for purchasing large fixed assets that facilitate business growth. Common uses include acquiring commercial real estate, constructing new facilities, renovating existing properties, or purchasing major equipment. These investments are intended to boost operational capacity, increase efficiency, and create jobs.
What Can SBA 504 Loans Not Be Used For?
SBA 504 loans cannot be used for working capital, consolidating non-business debts, or speculative ventures. Additionally, they cannot finance projects that do not align with economic development, such as investments in rental residential properties or gambling facilities.
Is a Business Plan Needed for an SBA 504 Loan?
Yes, a detailed business plan is crucial for an SBA 504 loan application. The plan should outline your business’s objectives, revenue model, and market strategy. It must also include financial projections, details on how the loan will be used, and descriptions of the economic benefits of the funded project, such as job creation or community growth. A well-prepared business plan demonstrates your ability to repay the loan and creates confidence in your venture.
Maximum SBA 504 Loan Limits, Loan Terms & Approval
How Much Can I Borrow With an SBA 504 Loan?
An SBA 504 loan offers the opportunity to secure substantial financing for major business investments. The maximum amount a borrower can receive is $5.5 million for the portion funded by a Certified Development Company (CDC). However, the total project cost can exceed this limit, as 50% of the financing comes from a third-party lender, such as a bank, and the borrower contributes a minimum of a 10% down payment. Ultimately, the full amount you can borrow varies based on the project’s cost and the capacities of both lenders involved, making this program highly customizable for large-scale business needs. This provided estimating tool may be used as an SBA 504 loan rates calculator as well as an SBA 504 loan payment calculator for looking at potential loan costs for your business.
What Is the Typical Duration or Term of a Small Business Loan?
SBA 504 loans provide extended repayment terms, which are specific to how the funds are used. The loan term for the CDC portion is typically 10, 20, or 25 years, depending on whether the financing covers equipment or real estate. For example, loans for equipment often feature a 10-year term, while real estate investments may extend up to 25 years. These long terms result in lower monthly payments, allowing businesses to maintain cash flow while pursuing significant growth opportunities.
What Is the Maximum, Minimum, and Average 504 Loan Amount?
SBA 504 loans are designed for large asset acquisitions, which makes them ideal for businesses investing in high-value projects. The maximum amount for the CDC-funded portion is $5.5 million, with additional funding provided by the third-party lender. There is no formal minimum loan amount, though loans are generally used for projects starting around $100,000. The average loan for the CDC portion typically falls between $1 million and $2 million but varies widely depending on the project scope and borrower requirements.
How Long Does It Typically Take for a 504 Loan to Be Approved or Made?
The SBA 504 loan approval process requires thorough documentation and involves multiple layers of review. On average, the timeline from application submission to funding approval ranges from 60 to 90 days. This period includes reviews by the CDC, the third-party lender, and the SBA. Proper preparation, such as submitting all required documents upfront and working closely with your CDC, can help streamline the process and minimize delays. While the timeline may feel lengthy compared to other financing options, the low interest rates, extended terms, and substantial funding make the process well worth the wait. By understanding the loan limits, terms, and approval process, businesses can better plan for successful applications and maximize the benefits of the SBA 504 program.
SBA Loan Case Studies
First Bank of the Lake has established a proven track record in helping businesses grow, offering over 2,000 SBA loans in the past five years. Below are inspiring client stories showcasing real loan amounts, approval timelines, and how these funds made an impact.
A $2.2 million SBA 7(a) loan allowed the seamless acquisition of a well-established ski rental business in Colorado. With an approval process that was completed in just 35 days, the retiring owners experienced a smooth transition while ensuring uninterrupted service for customers. This timely financial support preserved a beloved local business and positioned the new owners for ongoing success.
Expanding operations for Lifetime Green Coatings, an eco-friendly floor coatings company, became possible thanks to a $400,000 SBA 7(a) loan. The funds covered equipment, initial working capital, and franchise fees, enabling the business to grow sustainably and continue its mission to provide eco-conscious home solutions.
Reed’s Moving Services utilized a $3.3 million SBA 7(a) loan to purchase commercial property, consolidating their operations under one roof. This move not only provided increased stability but also created opportunities for growth in their competitive industry. By securing their premises, Reed’s gained a solid foundation to expand its offerings.
With a $345,000 SBA 7(a) loan, Woof Gang Bakery & Grooming launched a new franchise location focused on dog grooming and baked goods for pets. The loan covered franchise setup costs, property build-out, and working capital, setting the stage for a thriving business that caters to the fast-growing pet care market.
Freelite AZ, a windows and door installation business, achieved a seamless ownership transition with the help of a $363,000 SBA 7(a) loan. The funds were utilized to buy out the retiring owner and provide working capital, positioning the business for a successful future and leaving room for growth opportunities.
Perfect Moving, an NYC-based relocation service, expanded its operations through a $3.6 million SBA 7(a) loan. The financing enabled the company to acquire additional storage properties and purchase new equipment, helping them meet the demands of a growing client base in the bustling New York City market.
Dan Billings fulfilled his entrepreneurial dream of launching a Tint World franchise in Texas with a $585,000 SBA 7(a) loan. The loan covered startup costs, equipment, and operating capital, paving the way for a successful new venture in the automotive services industry.
These real-life examples from First Bank of the Lake illustrate how SBA loans provide essential financial support to businesses across industries. Whether for acquisitions, expansions, or stabilizing operations, these loans empower entrepreneurs to achieve their goals and thrive.
Getting Started
The friendly financial experts at First Bank of the Lake offer SBA loans designed with the needs of our customers in mind. We financed more than $1.1 billion in SBA loans and were ranked as the 15th largest SBA lender in the United States in 2024. Since our founding in October 1985, we have offered outstanding customer service and the best financial options for their needs. Today, First Bank of the Lake offers loans for business enterprises across the United States. To learn more about our bank or learn more about SBA loans, visit our website or check us out on Facebook or LinkedIn. Our friendly and knowledgeable staff members will be happy to discuss your loan options with you and to help you achieve the highest degree of success in your chosen industry. Please contact us at (888) 828-5689 to get your business loan questions answered today!
Helpful Links
Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide loan advice. We cannot and do not guarantee their applicability or accuracy in regards to your circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all financial issues.
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