If you're a small business owner in Florida looking to purchase real estate, heavy machinery, or equipment for your business, an SBA 504 loan might be the perfect financing solution. 

With low down payments, fixed interest rates, and extended repayment terms, these loans are designed to help businesses grow while preserving working capital.

What is an SBA 504 Loan?

An SBA 504 loan is a financing tool administered by the U.S. Small Business Administration that helps small businesses purchase fixed assets for expansion or modernization. 

The typical structure involves three parties:

• The Borrower (You): Contributing a minimum of 10% of the project cost
• A Commercial Lender: Providing approximately 50% of the project cost
• FBDC: Providing about 40% of the project cost, backed by an SBA-guaranteed debenture

Who Qualifies for an SBA 504 Loan?

To be eligible for an SBA 504 loan through FBDC, your business must meet these requirements:

• For-profit business operating in the United States
• Tangible net worth not exceeding $20 million
• Net profit (after taxes) not exceeding $6.5 million for the previous two years
• Owner-occupied property (at least 51% for existing buildings)

FBDC's Six-Step Process for Securing an SBA 504 Loan

FBDC has established a streamlined, six-step process to help Florida businesses secure SBA 504 financing:

Step 1: Meet with an FBDC Business Development Officer (BDO)

The process begins with a consultation to determine if your project qualifies for an SBA 504 loan. During this meeting, the BDO will:

• Assess your eligibility based on business type, financials, and project scope
• Explain the loan structure and requirements
• Guide you through the initial application process

Step 2: Underwriting

Once your application is submitted, FBDC's credit team takes over to:

• Gather all necessary documentation (typically including three years of tax returns, interim financials, and personal financial statements)
• Review your business plan and financials
• Submit your application for internal approval
• Prepare the package for SBA approval

Step 3: SBA Approval

FBDC submits your completed application to the SBA for review and approval. This step generally takes about 14 days from submission, according to FBDC's timeline.

Step 4: Loan Closing

After receiving SBA approval, you'll move to the closing phase, which typically occurs within 2-3 weeks. During this stage:

• Loan documents are finalized
• Any remaining conditions are satisfied
• Closing costs are paid (some fees can be financed into the loan)
• Legal documents are signed

Step 5: Loan Funding

Following the closing, funds are disbursed for your project. For standard projects, funding typically occurs within 45 days after closing. For projects involving construction, this timeline may be extended.

Step 6: Loan Servicing

What sets FBDC apart is their commitment to supporting you throughout the life of your loan. Their servicing team helps ensure:

• All SBA procedures and policies are followed
• Any questions or issues are addressed promptly
• Annual documentation requirements are met
• Assistance with any loan servicing actions that may arise

Benefits of Choosing an SBA 504 Loan Through FBDC

Low Down Payment

One of the most significant advantages of the SBA 504 program is the low down payment requirement—typically just 10% of the total project cost. This allows you to preserve capital for other business needs.

For qualifying smaller projects in underserved communities, FBDC even offers a Down Payment Assistance Program that can cover up to 50% of your required contribution.

Fixed Interest Rates

As of April 2025, FBDC reports the following fixed rates:

• 25-Year Debentures: 6.437%
• 20-Year Debentures: 6.457%
• 10-Year Debentures: 6.348%

These fixed rates provide stability and predictability for long-term financial planning.

Extended Repayment Terms

SBA 504 loans offer longer repayment terms than most conventional financing:

• Up to 25 years for real estate
• Up to 10 years for machinery and equipment

Sample Financing Breakdown

For a $1 million project, here's how the financing would typically be structured:

What Can You Use an SBA 504 Loan For?

Eligible uses of SBA 504 loan funds include:

• Purchasing land or buildings
• New building construction
• Modernizing, renovating, or improving existing buildings
• Purchasing machinery or equipment with a 10-year useful life
• Soft costs related to the project
• Refinancing existing commercial real estate debt
• Refinancing existing machinery and equipment debt

Ineligible uses include working capital, inventory, rolling stock, broker fees, and bank attorney fees.

Why Choose FBDC for Your SBA 504 Loan?

FBDC has distinguished itself as a leader in SBA 504 lending through its commitment to:

Certainty: With over 35 years of experience, FBDC provides reliable support and expert guidance throughout the process.

Speed: Their streamlined process ensures efficient approval and funding timelines, minimizing delays in your project.

Service: From application through the life of your loan, FBDC's team provides continuous support to ensure your success.

Main Take-Away

Securing an SBA 504 loan through FBDC offers Florida small businesses an opportunity to acquire essential fixed assets with favorable terms. The six-step process—from initial consultation to ongoing servicing—provides a clear path to financing with the support of experienced professionals.

If you're considering an SBA 504 loan for your business, schedule a no-risk consultation with FBDC to determine your eligibility and begin the application process. With their expertise and commitment to service, you'll have a trusted partner throughout your financing journey.

SBA 504 Loan FAQs

What is the minimum credit score required for an SBA 504 loan?

While the SBA doesn't set a specific minimum credit score, most lenders look for a score of at least 650-680. The focus is on your overall financial picture, including business cash flow, management experience, and repayment ability, not just credit score.

Can I use an SBA 504 loan to refinance existing debt?

Yes, you can use an SBA 504 loan to refinance existing commercial real estate debt, machinery/equipment debt, and other eligible business debt. This option allows you to potentially secure better terms and rates on your existing obligations.

How long does the entire SBA 504 loan process take from application to funding?

The typical timeline is approximately 60-90 days. FBDC aims for 14 days for SBA approval, 2-3 weeks for closing, and 45 days for funding after closing (longer if construction is involved).

What happens if I want to pay off my SBA 504 loan early?

SBA 504 loans do have prepayment penalties that decline over time. For 20-25 year loans, the penalty applies for the first 10 years, while for 10-year loans, it applies for the first 7 years. The penalty starts at 5% and decreases by 1% each year until it reaches zero.

Do I need to occupy the entire building I purchase with an SBA 504 loan?

No. For existing buildings, you must occupy at least 51% of the space. For new construction, you must initially occupy 60% of the space, with plans to occupy 80% within 10 years. This allows for some rental income from the property.