In 2025, with interest rates stabilizing and commercial real estate prices expected to climb, more small business owners are asking: Should I continue leasing, or is it time to own? Financial advisors across the U.S. are recommending the SBA 504 loan program as a strategic path to long-term facility ownership and equity-building.
🏢 What Is an SBA 504 Loan?
The SBA 504 loan is a government-backed financing tool designed to help small businesses purchase or upgrade fixed assets such as:
- Commercial real estate (office, warehouse, manufacturing)
- Construction or renovation projects
- Long-term equipment with a 10+ year lifespan
- Land acquisition and site improvements
The structure involves:
- Certified Development Company (CDC): Finances 40%
- Bank or credit union: Finances 50%
- Borrower: Contributes just 10% equity
📈 Why Advisors Recommend SBA 504 Loans in 2025
1. Long-Term Fixed Interest Rates
Enjoy stability with fixed rates for up to 25 years. In 2025, SBA 504 loan rates are averaging 6.25%–6.75%, lower than most traditional commercial loans.
2. Low Down Payment
Just 10% equity required for most purchases—15% for special-use or new businesses. This is ideal for entrepreneurs with healthy cash flow but limited reserves.
3. Equity-Building Potential
Instead of paying rent, 504 borrowers build long-term value through ownership. This can lead to:
- Increased business valuation
- Borrowing against equity for expansion
- Greater exit or succession planning options
4. Regulatory Improvements in 2025
The SBA has made the 504 process more accessible through:
- Simplified documentation for real estate purchases
- Clarified eligibility standards and occupancy rules
- Streamlined underwriting by CDCs and lenders
🔗 Read more on 2025 SBA updates
🧰 SBA 504 Loan Use Cases
- Buy an office, warehouse, or industrial facility
- Construct or expand your own space
- Modernize an existing property
- Acquire machinery or equipment with 10+ year use
Note: Your business must occupy at least 51% of an existing building or 60% of new construction.
✅ Who’s Eligible?
You may qualify for an SBA 504 loan in 2025 if your business:
- Operates for profit
- Is based in the U.S. or its territories
- Has a tangible net worth under $20 million
- Earns less than $6.5 million in after-tax income (2-year average)
- Is 100% owned by U.S. citizens, nationals, or lawful permanent residents
🔗 More on SBA ownership rules (Forbes)
📑 SBA 504 Loan Application Process
- Connect with a CDC: Start with a Certified Development Company in your area.
- Identify a Bank Partner: Choose a private lender for the 50% funding portion.
- Prepare Documents:
- 2–3 years of tax returns
- Business plan and projections
- Credit reports
- Property cost and scope of work
- Submit Your Application: CDC and lender will review before forwarding to the SBA.
- Close and Disburse: Once approved, funds are disbursed based on your project timeline.
🧠 Financial Advisor Tips for SBA 504 Success
- Start early: Begin at least 60–90 days before your intended property closing.
- Choose experienced partners: Work with lenders and CDCs that specialize in 504 deals.
- Think long-term: Choose a facility that matches your 10–20 year vision for growth.
Facility ownership through SBA 504 loans isn’t just about acquiring real estate—it’s about creating long-term financial security. In 2025, advisors agree: now is the time to act. Fixed rates, lower entry barriers, and better loan transparency are making SBA 504 loans the top choice for strategic business property investment.
Whether you’re looking to stop paying rent or solidify your business footprint, owning your facility could be the smartest financial decision you make this year.
🚀 Take the Next Step with BoomerBiz Loans
BoomerBiz Loans specializes in SBA 504 and 7(a) financing for growth-focused entrepreneurs. With our streamlined 3-step application and approvals in 24–48 hours, we make facility ownership simple and strategic.
Get funded for up to $10 million and lock in your business’s future today.
👉 Start Your Loan Application Now
📚 Bonus Reads for Business Buyers
- SBA 504 vs. 7(a): Which Loan Fits Your Property Purchase?
- Understanding SBA Equity Injection Rules
- SBA Loan Prep Checklist: Docs & Timelines
- How to Work with a Certified Development Company (CDC)
- Top 7 SBA Loan Approval Tips for 2025
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