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SBA 504 Loan Program

To help small businesses save on financing costs, the SBA 504 program is a long-term, fixed-rate financing tool designed to provide attractive financing options for small businesses in need of expansion and/or purchases. Terms are up to 25 years.

BDC provides the SBA 504 Loan Program through its associated company Certified Development Corporation(CDC). CDC is a private, non-profit corporation designed to encourage economic development in South Carolina by working with the SBA and private sector lenders to provide attractive financing options for small businesses in need of expansion and/or acquisitions of long term assets such as real estate and long-life equipment.

Maximum debenture: $5,500,000

Debenture maximum: 40% of project

SBA 504 Application Package SBA 504 Debenture Brochure Compare Programs (PDF)

(subject to the limitations above)

  • Debenture secured by 2nd mortgage
  • First mortgage lender amount unlimited
  • Change in ownership transactions are eligible

Use the SBA 504 Loan Program to Refinance Commercial Mortgage and Eligible Business Debt

Small business owners and bankers can now take advantage of the SBA’s permanent change to the 504 Loan Program allowing for the refinance of eligible business debt. This is an essential tool to lower monthly debt obligations and access equity in commercial real estate.

This SBA program, administered by the Certified Development Corporation of South Carolina (CDC of SC), provides small businesses with competitive, full term, fixed interest rate refinancing with repayment terms of 25 years for up to 90% of the appraised value of commercial real estate property. In addition, and only via this program, can an SBA 504 loan be used to refinance eligible business operating expenses (cash-out option).

Applicant Benefits

  • Borrowers can refinance certain eligible business operating expenses (e.g. salaries, rent, utilities, inventory), however a maximum 85% loan-to-value (LTV) applies and the business operating expenses portion of the project may not exceed 25% of the value of the eligible fixed asset(s) securing the qualified debt
  • 504 refinancing costs may be included in the loan
  • The applicant’s equity contribution may be satisfied by its equity in the eligible fixed asset (the 504 project) serving as collateral for the refinancing project or by equity in any other fixed assets that are acceptable as collateral

Lender Benefits

  • Increase loan production
  • Reduce risk – typical exposure is 50% of the total SBA 504 loan
  • Reduce your client’s equity requirement – typically 10% of equity in eligible collateral
  • Mitigate loan limits to any one client

Basic Eligibility Guidelines

  • Two or more commercial loans can be refinanced
  • The loan to be refinanced must be at least 24 months old and in good standing for the last 12 months
  • The business must have been in operation for all of the two-year period ending on the date of application, as evidenced by the financial statements submitted at the time of application.  (some exceptions may apply)
  • An appraisal is not required to submit a refinance application, but will be a condition of funding
  • Business must occupancy at least 51% of the premises at the time of the application submission

Equity Requirements

Business must pay 10% to 20% of project costs

  • If business over 2 years old and general purpose real estate: 10%
  • If business over 2 years old and special purpose* real estate: 15%
  • If business less than 2 years old and general purpose* real estate: 15%
  • If business less than 2 years old and special purpose real estate: 20%

    * as defined by SBA

Use of Proceeds

  • Purchase major fixed assets such as land, buildings, improvements, long term equipment, construction and renovation
  • Soft costs such as architect and engineering fees, interim interest, environmental studies, equipment setup and delivery, and certain legal fees related to the loan
  • NOT ELIGIBLE: General working capital, accounts receivable, inventory, franchise fees and vehicles

Interest Rates

  • Generally slightly above long-term Treasury Rate
  • Based on current market at time of funding for 5- and 10-year Treasury Issues plus an increment above the Treasury Rate
  • The debenture rate as of 5/8/2020 is:
    20-Year 504 Rate: 2.688%
    25-Year 504 Rate: 2.761%


  • For-profit business
  • Tangible net worth not in excess of $15,000,000 and average after tax net profit cannot exceed $5,000,000 for the previous two years
  • Job creation or retention requirement: One full-time equivalent job created or retained for each $65,000 of Debenture amount unless a small manufacturer, then 1 job per $100,000

Fees Relating to Debenture

  • Approximately 3% of the debenture amount and financed with the debenture
  • Funded with debenture proceeds


  • 10 years on equipment
  • 20-25 years on real estate

BDC Resources

Rob Evans

Rob Evans

Senior Vice President & Loan Officer


Ted Crosson

Ted Crosson

Vice President & SBA Lending Officer



Sample Project

ABC Enterprises has been leasing a 10,000 square-foot retail space for five years. A comparably-sized building on the same block has just gone on the market for $1,000,000. ABC’s owner, John Smith, wants to make an offer on the building, but he’s uncertain if he can come up with the 25% ($250,000) down payment that would be required with conventional financing. Jane Williams, his long-time lender, has the solution: an SBA 504 loan! Here’s how it works: the bank will finance a $500,000 first mortgage for 50% of the cost, and Certified Development Corporation will finance a $400,000 second mortgage SBA 504 loan for 40% of the cost. Therefore, Mr. Smith’s down payment will only be $100,000, allowing him to conserve his working capital and expand the business.  Note that these percentages are subject to change.


Project Costs

Percentage of Project Costs

First Mortgage     



SBA Second Mortgage     



Borrower Equity     



Total Project     



504 Calculator

Land and/or Purchase of Existing Building: 

New Construction/Remodeling, etc.: 

Machinery & Equipment: 

Appraisal, Architect, Environmental, etc.: 

Contingency, Construction, Interest, Fees: 


Total Project: 

504 Project Worksheet Dollar Amount Project % Term Rate Payment Amount

Owner Equity:

1st Mortgage

CDC of SC:
2nd Mortgage

Total Project: 




Net Debenture:

Administrative Costs: 504 Loan Fees

Gross Debenture Amount: 

Balance to Borrower: 

Third Party Lender Fee: