Wasatch Business Finance

SBA 504 Eligibility
Frequently Asked Questions

SBA 504 Eligibility

Most businesses are eligible for the SBA 504 program

To qualify for the SBA 504 program, here are the basics:


  • You must occupy 51 percent of the property within one year of funding (existing real estate).

  • For new construction, the business must occupy a minimum of 60 percent of the property.

  • The net worth of the business cannot exceed $15 million.

  • Post-tax profits for the last two years cannot exceed $5 million. Or, you can qualify via size standards based on the number of employees.

The personal net worth of the business owner is not a factor in determining eligibility.

If you are located in Utah, contact us for a free pre-qualification.  Complete eligibility requirements can also be found on the SBA 504 web page.

Contact our team & we’ll get back to you the same business day.

SBA 504 FAQ's

What You Need to Know

  • What is my down payment on an SBA 504 loan?


The down payment is generally 10% of the total project cost and can include soft and closing costs.  Startup businesses and special purpose real estate may require a larger down payment.  In no event shall the required down payment exceed 20% of the total project cost. 


  • What is the SBA 504 loan structure?


The required down payment is generally 10%. The lender finances 50% in a 1st Deed of Trust position and the SBA finances 40% in a second Deed of Trust position. Click here for more information.

  • Can I include closing costs in the loan amount? 


Yes, closing and soft costs can be included.


  • Can I refinance an existing building loan?


Yes, the SBA allows for the refinance of most existing real estate loans.

  • Can I do a cash out refinance on an SBA 504 loan?


Yes, The SBA allows for cash out to support operating needs. 


  • What is the definition of owner occupied?


A building is considered owner occupied when the owner occupies 51% or more of the total space.  When construction is involved, the owner must occupy 60% of the total space. 


  • Are startup businesses eligible?


Yes, startup businesses are eligible, but may be subject to higher down payments and underwriting restrictions. 


  • Am I eligible for SBA 504 loan financing if I have tax liens?


No, an SBA 504 loan cannot be used to pay off tax liens and an SBA 504 loan cannot be approved when tax liens are present.

  • Do I have to create a real estate holding company?


The SBA requires that the real estate be held in a separate single purpose real estate holding entity.  This is a structural requirement for SBA 504 financing. 


  • Will the SBA finance franchise fees? 


No, franchise fees cannot be included in an SBA 504 loan.


  • Will the SBA finance goodwill and intangible assets?


No, goodwill and intangible assets cannot be included in an SBA 504 loan.

Get Pre-Qualified Today!

U.S. Small Business Administration SBA 504 Loan Program Details