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SBA 504 Loans

The SBA 504 Loan Program provides long-term, fixed rate financing up to $5 million for major fixed assets that promote business growth and job creation.


  1. Contact your preferred bank for a loan. If the lender recognizes that an SBA 504 loan is a good fit, they will proceed to contact SCKEDD to determine if the project is eligible.

  2. Once the loan is approved by the bank, the bank sends the loan to SCKEDD so we can begin the underwriting process.

  3. When the loan package is complete and approved by our Loan Review Committee, we submit it to SBA.

  4. If SBA approves the loan, our team assists you, the borrower, for the life of the loan.


Commercial real estate

For commercial real estate you may consider an SBA 504 loan. SBA 504 Loan provides business owners with up to $5 million for purchasing real estate and equipment. This popular program features a significant lower down payment, long-term fixed rates, and lower fees than the SBA 7 (a) loan program. If you are buying, constructing, renovating a building, or purchasing heavy machinery or equipment, the SBA 504 loan program may be idea for your business needs.

SBA 504 loan advantages

Low down payments

SBA 504 loans provide an opportunity to provide a smaller down payment. This allows your business to conserve working capital to grow your business.

Interest Rates Below Conventional Loan Rates

The SBA 504 loan has low interest rates that vary based on market forces. The actual interest rate that the borrower will pay is calculated based on the debenture rate for the month the loan is funded. SBA 504 loans are funded by monthly bond (debenture) sales to investors on Wall Street.

Fixed Interest Rates

Fixed interest rates help with budgeting. The SBA 504 loan program offers a fixed rate for 10 to 25 years on real estate and long-term equipment, based on the useful life of the equipment.


Qualified borrowers can use SBA 504 loans to

  • Buy, build or renovate commercial real estate

  • Purchase machinery or equipment

  • Refinance debt for commercial estate and equipment



What are the requirements for an SBA 504 loan? You may qualify if you and your business meet the following criteria

  • The business is for-profit

  • The business is in the state of Kansas

  • The business is valued at less than $15 million and the business has an after-tax profit of less than $5 million a year over the average of two years

  • The business owner will occupy 51% or more of commercial real estate that is being renovated or purchased

  • The business owner will occupy 60% or more of commercial real estate that is being built

  • Individuals that own 20% or more of the business are willing to act as personal guarantors

  • The business owner can meet the down payment requirements


Down payment requirements

You can expect to put down 10% to 20% of the project on average. The balance is often financed in part by a bank, up to 50% of the total loan, and in part by SCKEDD, up to 30 to 40% of the total loan.


Interest rates

Interest rates for the Small Business Administration 504 loan program are set one time per month with a bond sale. They are FIXED for the life of the loan and fully amortized.


There are generally four fees a small business borrower will pay for this loan

  1. A one-time origination fee of 2.65% of the SBA 504 portion of the loan

  2. A one-time bank participation fee of 0.5% of the bank’s loan amount

  3. Attorney closing costs of $2,500

  4. Recording and title costs - typically financed as part of the loan


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