We now offer SBA 504 Loans! Low Rates - Up to 90% Financing
Biddeford, ME 207-282-1748

SBA 504 Loans

SBA 504 Loans for Growing Businesses

Southern Maine Finance Agency (SMFA) is pleased to offer the popular SBA 504 program to businesses for owner-occupied property.

What is an SBA 504 Loan?

The Small Business Administration 504 Loan Program is a long-term financing tool that promotes economic development within a community.  The 504 Program provides small businesses with long-term, fixed-rate financing to acquire major fixed assets such as real estate or machinery and equipment for expansion or renovation.  The small business is able to obtain up to 90% financing on these assets. 

SBA 504 loans may be used for:

  • Purchase of land and improvements, including an existing building
  • Construction of a new facility
  • Modernizing or renovating an existing facility
  • Purchase of machinery and equipment with a minimum useful life of 10 years
  • Other soft costs associated with any of these aforementioned projects
  • Some debt refinance

Typically, the financing structure is as follows:

Source% of ProjectLien PositionInterest Rate & TermMaximum Loan
Bank501stMarketNo Maximum

(SBA Debenture)
Up to
20 or 25 years Fixed for Real Estate or 10 years Fixed for Equipment

$5,000,000 ($5,500,000 per project for manufacturers and green projects)



Contact us today for the latest SBA 504 interest rates!

SBA Lender

The SMFA Advantage

Learn about the unique SMFA Advantage! Down payment financing available, bridge loan funding to minimize closing risk to your bank, first mortgage loan participations.

In addition to offering SBA 504 funding, we can also provide access to other financing types, including term loans; senior short- or long-term debt; subordinated debt.

Advantage to the Borrower

Unlike conventional loans, SBA 504 loans are structured to help preserve working capital.

  • The small business owner gets the tax benefits and appreciation on the real estate, and also locks in occupancy costs for the long term with financing tailored to the borrower’s needs.
  • With financing available for up to 90% of the project cost, SBA 504 loans offer an affordable down payment, enabling the borrower to conserve working capital and retain liquidity to meet operating needs.
  • Terms are fixed for the life of the loan, so there are no payment uncertainties facing the borrower.
  • The SBA 504 borrower can borrow up to $5 million in SBA funding. Manufacturers and energy related business can quality for up to $5.5 million.

Advantage to the Lender

  • SBA 504 rates and terms offer lenders a competitive advantage when soliciting new clients.
  • SBA 504 offers an improved loan to value for the first mortgage lender.
  • SMFA processes all of the paperwork:
  • Organizes the application and completes the paperwork
  • Provides the financing
  • Processes, closes and services the loan

Other Important Facts About SBA 504 Loans

  • Owner-occupancy percentages required are 51% of the square footage for existing buildings or 60% for new construction.
  • Soft costs, such as appraisal, environmental, interim interest, etc., can be included if the collateral value allows.
  • Refinancing is limited to 50% of the expansion amount for an expansion loan. SBA 504 loans can also be used to build additions.
  • Businesses can qualify for multiple SBA 504 loans.
  • Guarantees are required for owners with 20% or more ownership in either an operating company or a real estate entity.
  • Liquid asset limitations of borrowers are calculated per individual, not in the aggregate, and must be less than total financing.
  • If financing a new business or a single use property, 15% equity will be required. If both, 20% is required.

How To Get Started

The borrower will provide a balance sheet and income statement for the previous three years, as well as:

  • Three years of corporate IRS tax returns
  • A personal financial statement and two years of IRS personal tax returns for each guarantor
  • Projected income statement for the first two fiscal years after the loan, with a description of assumptions attached.
  • A copy of key cost documents such as real estate purchase agreements, contractor cost estimates, vendor quotes for machinery and equipment, etc.
  • A completed and signed application.

Contact us today for the latest SBA 504 interest rates!