Conventional first mortgage
The first Deed of Trust / Mortgage typically covers 50% LTV and can be structured for up to 25 years.
SBA CDC / 504 Loans
BLC helps business borrowers structure SBA CDC/504 financing for acquisition or refinance of owner-occupied commercial real estate, pairing a conventional first mortgage with a CDC/SBA second and coordinated interim financing.
Business real estate. Long-term structure.
The CDC/504 program is a long-term financing tool for small businesses that need brick-and-mortar financing for acquisition, refinance, renovation, or modernization of owner-occupied commercial real estate.
For borrowers, the value is the structure: a conventional first mortgage, a CDC/SBA second mortgage, and a defined equity contribution. BLC helps determine whether the property, borrower, occupancy, and SBA requirements align — then works with knowledgeable CDC partners so the process is navigated efficiently.
504 capital stack
The SBA 504 structure gives borrowers a defined framework for the first mortgage, CDC/SBA second, and equity injection, with different maximum LTV levels depending on property type and project characteristics.
The first Deed of Trust / Mortgage typically covers 50% LTV and can be structured for up to 25 years.
The CDC/SBA second mortgage generally falls within a 30% to 40% range depending on the property type, project, and SBA 504 structure.
Borrower equity injection typically ranges from 10% to 20%, depending on property type, project structure, and SBA requirements.
Program terms
Use this as the quick-reference version of the program. Final loan structure depends on SBA eligibility, property type, borrower qualifications, collateral review, and the economics of the transaction.
Eligibility and proceeds
Use this section to quickly understand what an SBA 504 loan can support, what it cannot be used for, and what borrowers must generally demonstrate before moving forward.
Borrower eligibility
Eligible uses
Ineligible uses
Interim financing
After the conventional first mortgage closes, SBA funding of the CDC/SBA second mortgage can typically take 45 to 90 days. To support smoother execution, BLC provides an interim loan that is paid off with the SBA debenture.
The interim note is structured for up to 90 days with interest-only payments. Interim loan rates are generally listed at 7.50% to 8.50% with a 0.50% loan fee, subject to final transaction terms.
The conventional first Deed of Trust / Mortgage closes as part of the broader 504 project structure.
BLC requires concurrent closing with the SBA when interim financing is used.
The interim note covers the short window before the CDC/SBA debenture funding is completed.
The interim loan is paid off once the SBA debenture funds.
Multi-use property types
Special-use property types
Underwriting review
SBA 504 execution is more than a rate or term. The business occupancy, ownership profile, management experience, DCR, FICO, recourse, and project eligibility all matter.
Execution process
The process gives borrowers, referral partners, and CDC contacts a clearer path from initial eligibility review to a viable SBA 504 structure.
Confirm the property type, occupancy, purchase or refinance objective, business use, and requested capital structure.
BLC leverages CDC/SBA knowledge and strategic CDC relationships to evaluate eligibility, use of proceeds, borrower qualifications, and the appropriate SBA 504 path.
Build around the conventional first mortgage, CDC/SBA second mortgage, required equity, and interim financing mechanics.
Move the transaction through closing with CDC/SBA timing, interim note mechanics, and the debenture payoff path clearly defined.
Discuss SBA 504 financing
Send BLC the property, project cost, requested financing, business occupancy, use of proceeds, borrower background, and timing. The team can help determine whether the SBA CDC/504 path is viable.
SBA 504 FAQs
It is a long-term financing structure for eligible small businesses needing commercial real estate financing, typically using a conventional first mortgage, a CDC/SBA second mortgage, and borrower equity.
A common structure begins with a 50% conventional first mortgage, with the CDC/SBA second generally ranging from 30% to 40% and borrower equity typically ranging from 10% to 20%, depending on the project and property type.
The published program allows up to 90% LTV for multi-purpose properties and up to 85% LTV for limited or special-purpose properties, subject to underwriting and final approval.
The subject property must generally be at least 51% occupied by the small business concern.
No. The program cannot be used for working capital, inventory, or business acquisitions.
BLC lists prior ownership and management experience, minimum 650 FICO, full recourse, personal guarantees from 20% or greater owners, and a 1.1x minimum DCR as key requirements.