SBA 504 Loan Eligibility

SBA 504 loan criteria

An SBA 504 loan is fixed-asset financing for land, buildings and manufacturing equipment or machinery with a useful life of 10 years.

Size of loan

The maximum loan size through the SBA 504 loan program is typically $5 million. Manufacturing companies with certain specific NAICS codes and projects meeting certain environmental or energy efficiency goals can obtain up to $5.5 million in SBA funds. The minimum loan size is $50,000.

A business can obtain more than one loan from the SBA, as long as the total outstanding balances do not exceed the maximum loan amount.

For a business to qualify for an SBA 504 loan:

Business is a for-profit, owner-operated entity that has a net worth of less than $15 million and a net-profit-after-tax averaging less than $5 million for the previous two years.

The small business must create or retain one full-time equivalent job for every $65,000 loaned by the federal government ($100,000 for manufacturing).

Start-up businesses are not excluded from the SBA 504 loan program, but higher levels of financial equity injection are required for companies less than two years old.