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SBA 504 Loans: Financing Real Estate and Heavy Equipment

August 19, 2026

If the 7(a) loan is the all-purpose tool, the 504 loan is the one built specifically for the big stuff, buildings, land, and heavy machinery.

What 504 Loans Are Built For

Purchasing owner-occupied commercial real estate

Ground-up construction or major renovation

Buying heavy equipment or machinery

Why the Down Payment Is Lower

Financing Piece Typical Share
Bank / lender portion ~50%
SBA-backed debenture ~40%
Owner down payment ~10%

SBA 504 Loans

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That structure is why 504 loans typically only require around 10% down, well below the 20-30% many conventional commercial real estate loans ask for.

Frequently Asked Questions

Can I use a 504 loan for working capital?

No, 504 is specifically for fixed assets. For working capital, a 7(a) loan is the better fit.

How large can a 504 loan get?

The SBA-backed portion can reach into the millions depending on the project and job-creation criteria.

The Bottom Line

If your next move is buying a building or major equipment rather than covering day-to-day expenses, the 504 is worth a serious look. Visit our blog to learn more, or reach out to talk through your project.

Related Reading

SBA Loan Guy home

U.S. Small Business Administration

SCORE — free SBA business mentoring

Greater Houston Partnership

U.S. Chamber of Commerce

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What You Get

Readiness Score

A distilled, 0–100 snapshot of how fundable you are based on credit, cash flow, equity, and documentation. Plus the top fixes to raise your score fast.

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