Benefits & Rates

There are significant advantages to using SBA 504 loans rather than traditional commercial loans—typically lower down payment requirements, lower interest rates and longer repayment terms—so a business can preserve its cash for ongoing operational needs. The SBA 504 loans are attractive because its loan structure, at its core, is devised to help eligible businesses expand and grow.

California Lending Partners and the SBA, together in their combined fiduciary roles, are the second mortgage holders. Third party lenders—banks, credit unions and other commercial lenders—hold the first mortgage loan (trust deed) or lien.


SBA: Up to $5 million; $5.5 million for manufacturers and energy efficiency projects
Third Party Lender: Minimum 50% of project cost, no maximum

Interest Rate

SBA: Below-market, fixed and based on 10-year Treasury rate at time of funding
Third Party Lender: Fixed or Variable market rate

Term of Loans

SBA: 10 to 20 years fully amortized
Third Party Lender: Minimum 10 years

Financing & Fees

With relatively low origination, prepayment and assumption fees, SBA 504 loans become increasingly viable options for businesses. Plus, all businesses are able to receive a loan prequalification, free of charge, from a California Lending Partners Business Development Officer.

90% Financing

Additional 5% down payment required for single purpose facility OR start-up business; additional 10% down if both single purpose/start-up


SBA/CDC: One-time origination fee of 1.5% can be included in loan amount. Annual servicing fee of 0.625% is included in monthly payments
Third Party Lender: Points vary; approximately 1.0% can be included in loan amount.


SBA: Penalty is a declining percentage of the balance for the first five or 10 years depending on loan term
Third Party Lender: Varies


If building is sold during loan term, SBA 504 loan portion can be assumed by a new buyer, if qualified. Fee is 1% of outstanding loan balance.