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Wasatch Business Finance

Most Businesses are Eligible for an SBA 504 Loan

How Hard is it to Qualify for an SBA 504 Loan?

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 Loan FAQ's

What credit do you need for an SBA 504 Loan?
What is the maximum lo
an amount for an SBA 504 Loan?
Do you need a down payment for an SBA 504 Loan?
What disqualifies you from getting an SBA 504 Loan?
How long does it take for the SBA to approve a 504 loan?

Check out some of the answers below and contact us for more information.

  • 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.

  • What credit do you need to qualify for an SBA 504 Loan?

You must be able to show a two-year minimum business history. Personal credit scores of 660 or higher and sufficient business and cash flow demonstrated via three years of financials.

  • What is the maximum loan amount for an SBA 504 Loan?

SBA 504 Loans are generally capped at $5 million. Certain eligible energy efficient or manufacturing projects can qualify for more that one SBA 504 loan up to $5.5 million dollars, each.

  • What disqualifies you from getting an SBA 504 Loan?

Businesses engaged in illegal activities, loan packaging, speculation, multi-sales distribution, gambling, investment or lending, or where the owner is on parole.

  • How long does it take to get an SBA 504 Loan approval?

Once the SBA receives your application, it takes about 5-7 business days to approve or decline your application.


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