SBA 504 for owner-occupied commercial real estate

10% down against the 25 to 35% a conventional bank loan requires. The structure, the current rate, and who this program fits.

The Corlan desk · Published August 2026 · Reviewed 18 October 2026 · 5 min read · Source: SBA 504 debenture sale, 6 August 2026

Key takeaways

SBA 504 requires 10% down.
The 504 CDC portion priced at 6.19-6.27% effective at the 6 August 2026 debenture sale, fixed for the life of the loan.
Structure: bank first mortgage at 50%, CDC second at 40%, borrower equity at 10%. Special-purpose property or a start-up business usually goes to 85%, and both together to 80%.
This is a strong fit for an operating business that occupies its own building, medical, dental, veterinary, most owner-occupied CRE.

Why 10% down changes the math

A conventional bank loan on owner-occupied commercial real estate typically asks for 25 to 35% down. SBA 504 asks for 10%. For a business owner buying the building they operate out of, that difference is often the whole decision between buying now and renting another five years.

The structure

504 is two loans stacked, not one: a bank first mortgage covering 50% of the project, a CDC (Certified Development Company) second covering 40%, and the borrower’s 10% equity. On a multi-use property where the business occupies enough of it, total leverage can reach 90%.

The 504 stack

Bank first

50%

CDC second (504)

40%

Borrower equity

10%

CDC portion priced 6.19-6.27% effective, fixed for life, at the 6 August 2026 debenture sale. Special-purpose property or a start-up business typically lowers that to 85%.

Who this fits

Medical and dental practices, veterinary clinics, auto repair and other owner-operated service businesses buying their own real estate. If the operating business will occupy the majority of the property, 504 is very likely the cheapest path to ownership available.