SBA 504 Loans

For Businesses with a Net Worth under $15 Million

This SBA Program involves two loans — one from Highland Bank and the other from a Certified Development Company (CDC). It has higher loan limits, making it ideal for larger projects.

The loans may be used for real estate, construction, equipment, expansion and more.

  • Terms of 10–20 years with lower payments
  • Below market fixed rates on SBA financing
  • Smaller down payment and no balloon payments


Download Highland Bank’s SBA Loans Comparison Chart

SBA 504 Loan Guidelines

  • For-profit business Tangible net worth less than $15 million
  • Net profit after tax less than $5 million
Loan Size
  • Maximum SBA loan amount is $5 million for projects meeting a public policy goal and $5.5 million for manufacturing companies
  • 50% financed by Highland Bank 40% financed by SBA through a Certified Development Company
  • 10% financed by borrower (more required for new businesses or special purpose real estate)
Use of Proceeds
  • LandBuildings (purchase, new construction, or renovation)
  • Machinery & Equipment (minimum useful life of 10 years)
  • Highland Bank holds the 1st mortgage on real estate or the 1st secured interest in machinery & equipment
  • SBA holds the 2nd mortgage on the real estate or the 2nd secured interest in machinery & equipment
Loan Terms
  • Highland Bank loan — minimum 10 years on real estate, 7 years on machinery & equipment
  • SBA loan — 20 years on real estate, 10 years on machinery & equipment
SBA Guaranty Fee
  • Highland Bank charges a normal fee on the bank loan
  • CDC and SBA fees are approximately 3% and are financed over the life of the loan
Interest Rate Spreads
  • Highland Bank loan — negotiated rate between borrower and Bank (fixed or variable)
  • SBA loan — below market fixed rate and fixed payment, loan rate set when debenture is sold