Current SBA 504 rates · September 2026 SBA 504 historical rates → Las Vegas (702) 877-9111Reno (775) 770-1240
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The program

SBA 504 Loans, Explained in Plain English

An SBA 504 loan finances owner-occupied commercial real estate and long-term equipment through three parts: a bank first mortgage for 50% of the project, an SBA-backed second mortgage at a fixed rate for 40%, provided by a Certified Development Company like NSDC, and a 10% borrower down payment. Start-ups and special-purpose properties typically put in 15% to 20%. Let's strip away the jargon.

2,350+SBA 504 loans funded
$1 billion+in SBA financing
23,914Nevada jobs supported
Since 1981Nevada's only statewide CDC

What is an SBA 504 loan?

It's a long-term, fixed-rate loan for buying, building or improving the property your business operates from, or for heavy equipment with a long useful life. The U.S. Small Business Administration doesn't lend the money itself. It guarantees a bond, called a debenture, that funds 40% of your project through a nonprofit Certified Development Company. A bank lends the first 50%. You bring the rest.

The point of the program is the down payment. A conventional commercial mortgage typically wants a quarter of the price in cash. A 504 usually wants 10%. On a $1,000,000 building, that's the difference between $250,000 and $100,000 at closing.

  1. 50% Bank or credit union First lien. Its own rate and term.
  2. 40% SBA 504 through NSDC Second lien. Fixed for 10, 20 or 25 years.
  3. 10% You Cash or equity you already hold.
The standard 504 structure. Start-ups (two years or less in business) and special-purpose properties put in 15%; both together, 20%. The bank half never changes.

How the three pieces fit together

You need both a bank and a CDC. That's the most common confusion in the whole program, so we'll say it first. The bank makes a normal first mortgage, holds the first lien, and sets its own rate and term. NSDC, as the CDC, packages and approves the SBA portion, funds it through the monthly debenture sale, and services it for the life of the loan. Both loans close on the same property, usually on the same day.

Because NSDC is a Premier Certified Lender, the SBA piece is approved in-house rather than sent to the SBA and queued. That's the reason most of our loans close within 45 days. What a CDC is, and why one is in your deal.

What you can buy with one

Eligible

  • An existing building your business will occupy (at least 51%)
  • New construction you'll occupy (at least 60%)
  • Land, as part of the project
  • Machinery and equipment with a long useful life
  • Renovation, parking, utilities
  • Certain refinancing of existing commercial mortgage debt

Not eligible

  • Rental or investment property you won't occupy
  • Working capital on its own
  • Inventory
  • Property you're buying to flip

Rental property and the 504 · Construction with a 504 · Refinancing with a 504

What it costs

ItemFigureNotes
Down payment10%15% for a start-up (two years or less) or special-purpose property; 20% for both
SBA portion rate6.54% effective, 25 yearsSeptember 2026, as published by NSDC. Fixed for the full term. All terms and how the rate is set
Terms10, 20 or 25 yearsReal estate is usually 20 or 25; equipment is usually 10
Feesroughly 3% of the SBA portionNormally financed into the loan, not paid up front. The fee breakdown
Maximum SBA portion$5 million$5.5 million for manufacturers and qualifying energy projects; no cap on total project size. Maximum amounts

Run your own numbers

Do you qualify?

Three tests decide it: your business is for-profit and under the SBA's size limits (tangible net worth under $20 million, average net income under $6.5 million); you'll occupy the building; and you're buying something on the eligible list. Most small businesses clear all three. The full requirements, with sources

How long it takes

  1. PrequalifyFast, free, no commitment
  2. ApplyWe build the package with you
  3. ApproveIn-house, as a Premier Certified Lender
  4. CloseMost loans close within 45 days
The four phases in detail

Nevada businesses that did this

SÜP restaurant, Midtown Reno
Reno · Restaurant

SÜP

$540,000

 LV Iron & Steel sign, Las Vegas
Las Vegas · Fabrication

LV Iron & Steel

A family shop that owns its building.

 4T's Repair, Wells, Nevada
Wells · Diesel repair

4T's Repair

Rural Nevada, same program.

Common questions

What are the disadvantages of an SBA 504 loan?
Honestly: more documentation than a conventional loan, a longer timeline than a cash purchase, and a prepayment premium on the SBA portion during the early years, which declines every year and is gone from year 11 on a 20 or 25-year loan. It also can't fund working capital on its own. The prepayment rules.
How hard is it to get an SBA 504 loan?
Less hard than the paperwork implies. The size limits rule out very few small businesses. The two things that genuinely sink applications are occupancy below the threshold and a deal the business can't service.
Can you pay it off early?
Yes. There's a declining prepayment premium on the SBA portion during roughly the first half of the term, then none.
504 vs 7(a): which one?
A 504 is for owner-occupied real estate and long-life equipment at a fixed rate, through a bank and a CDC. A 7(a) is a single bank loan, usually variable, that can also cover working capital, inventory or an acquisition. For buying a building, the 504 is normally cheaper. The full comparison.
What is a CDC?
A nonprofit the SBA licenses to deliver 504 loans in a defined area. NSDC is Nevada's oldest, largest and only statewide CDC. More on CDCs.
How long does it take?
Prequalification is fast. Most NSDC loans close within 45 days.

Keep reading

The rules

Do I qualify · Occupancy · Maximum amounts · Terms · Rental property

The money

Rates · Fees · Prepayment · The debenture · Calculator

The comparisons

504 vs 7(a) · 504 vs conventional · Owner-occupied real estate

The projects

Construction · Refinance · After you close

This page is for general informational purposes only and does not constitute legal, tax, or financial advice. Every figure is dated and sourced; SBA rules change, and this page is re-verified after each SOP update.

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We love owning this because we're in charge of our destiny. Full Tilt Logistics, NSDC borrower · 2,350+ loans since 1981