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Navigating the SBA 504 Loan Process: What Small Business Owners Can Expect

Small businesses are the backbone of our economy, and they often require financial assistance to grow and thrive. If you're a small business owner looking to expand your operations or invest in real estate, the Small Business Administration's (SBA) 504 Loan program can be a valuable resource. This program provides long-term, fixed-rate financing to small businesses, helping them secure the capital they need for real estate purchases, construction, or renovations. In this blog post, we'll guide you through what you can expect during the SBA 504 loan process.

1. Determine Eligibility

Before delving into the SBA 504 loan process, it's crucial to ensure that your business qualifies. Eligibility criteria typically include:

a. Size: Your business should be considered a small business as per the SBA's size standards, which vary by industry.

b. Use of Funds: SBA 504 loans are primarily meant for financing real estate, such as property purchase, construction, or renovation.

c. Owner's Equity: You must have a down payment of at least 10% of the total project cost.

d. Job Creation: The project should create or retain jobs to benefit the local community.

2. Find a Certified Development Company (CDC)

SBA 504 loans are administered through Certified Development Companies (CDCs). These nonprofit organizations work with the SBA to provide small businesses with access to affordable financing. You'll need to choose a CDC that operates in your area, as they'll assist you in navigating the application process. Wasatch Business Finance is your Utah CDC.

3. Prepare Your Business Plan

Having a well-structured business plan is a crucial step in the SBA 504 loan process. Your business plan should include:

a. Detailed project description.

b. Financial projections.

c. Information about your business's history and management.

d. The impact on local job creation and community development.

4. Choose a Lender

The SBA 504 program involves multiple parties, with a Certified Development Company (CDC) and a lender collaborating to provide you with the loan. You'll need to choose a lender that is willing to participate in the SBA 504 loan program. Wasatch Business Finance will help facilitate this process and can make recommendations based on your business needs.

5. Submit Your Application

With your business plan in hand, it's time to submit your loan application. Your CDC will guide you through the application process and help you gather all necessary documentation.

6. SBA Review

After your application is submitted, the SBA will review it and make a decision regarding your eligibility. This process can take several weeks to a few months. If approved, you'll move on to the next steps.

7. Appraisal and Environmental Assessment

Your CDC and lender will arrange for an appraisal of the property and an environmental assessment. These are standard procedures to ensure that the project meets the SBA's requirements.

8. Approval and Funding

Once the property appraisal and environmental assessment are completed and approved, your loan will receive final approval. After that, your lender will disburse the funds, and you can proceed with your real estate project.

9. Repayment

SBA 504 loans typically come with favorable terms, including long repayment periods and fixed interest rates. Repayment begins once your project is complete, and you'll make monthly payments to both the CDC and the lender.


The SBA 504 loan process can be an excellent option for small business owners looking to invest in real estate or expand their operations. While it may seem complex, with the right guidance and thorough preparation, it can be a valuable source of financing for your business. Working closely with a Certified Development Company (CDC) and a supportive lender will help you navigate the process with confidence. With the SBA 504 program, you can take your business to new heights and contribute to the growth of your community.

Contact Wasatch Business Finance today, for more information.

385-799-6700 or

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