SBA 504 Strategy

Strategic Asset Acquisition: Why Smart Money is Locking in Fixed Rates for Real Estate.

The 50-40-10 Structure

Maximize leverage, minimize down payment.

The 504 program splits the loan into three parts, allowing businesses to acquire assets with just 10% equity. This preserves working capital for operations.

50% Bank Loan
(1st Lien)
40% CDC / SBA
(Fixed Rate)
10% You
(Equity)

The Inverted Yield Curve Advantage

Long-term fixed rates are currently cheaper than short-term working capital.

Variable Rate (Prime + Spread)

~11.50%

Typical 7(a) Working Capital

SBA 504 Fixed Rate (25 Year)

~5.86%

Real Estate Acquisition

Strategic Play: With the yield curve inverted, locking in a sub-6% fixed rate for 25 years is a hedge against future inflation, while avoiding the 10%+ cost of variable rate debt.

Manufacturing Incentives

Special perks for industrial borrowers in FY 2025.

To support domestic production, the SBA offers additional incentives for manufacturers:

SBA 504 Strategy | LoanCompare

SBA 504 Strategy

Strategic Asset Acquisition: Why Smart Money is Locking in Fixed Rates for Real Estate.

The 50-40-10 Structure

Maximize leverage, minimize down payment.

The 504 program splits the loan into three parts, allowing businesses to acquire assets with just 10% equity. This preserves working capital for operations.

50% Bank Loan
(1st Lien)
40% CDC / SBA
(Fixed Rate)
10% You
(Equity)

The Inverted Yield Curve Advantage

Long-term fixed rates are currently cheaper than short-term working capital.

Variable Rate (Prime + Spread)

~11.50%

Typical 7(a) Working Capital

SBA 504 Fixed Rate (25 Year)

~5.86%

Real Estate Acquisition

Strategic Play: With the yield curve inverted, locking in a sub-6% fixed rate for 25 years is a hedge against future inflation, while avoiding the 10%+ cost of variable rate debt.

Manufacturing Incentives

Special perks for industrial borrowers in FY 2025.

To support domestic production, the SBA offers additional incentives for manufacturers:

  • 💰 No Upfront Guaranty Fee for manufacturing projects.
  • 📉 No Annual Service Fee for the life of the loan.
  • 🏭 Job Creation Waivers available for public policy goals.