Advantage CDC is a direct lender for SBA 504 loan program. However, we offer placement services for SBA 7(a) loans and, on very limited basis, conventional loans in an effort to help small business community succeed one way or the other.

504 Loan Program
Program offers up to 90% financing for Purchase OR Refinance of:

Loan Structure

Example – Typical Structure for a $2MM Total Project Cost




Lien Position














TOTAL Financing: $1,800,000 or 90%



Following is a comparison chart between the three loan types:


SBA 504 Loan

SBA 7(a) Loan


Down Payment

Usually 10%

Usually 10-30%

25% or more for Real Estate

Interest Rate

Fixed for 20 years (See current rate on Home Page)

Typically variable rate ranges from Prime Rate + 1% to 2.75%

Typically 25-year amortizing, fixed for 5-years in the mid 6% range

Length of Term

20-year for real estate

10-year for equipment 10-year for leasehold improvements

Determine by industry type

Annual sales restrictions

Number of employee restrictions

Determined by the lender

Loan Size

$125,000 to $5.5 million SBA portion only – total project cost could be $25 million or more

Up to $5 million

Determined by lender


Generally, only project assets being financed

Personal guarantees of 20% or more owners


Business guarantee

Subject assets acquired by loan proceeds

Pledge of personal residence unless bank can justify why unnecessary

Personal guarantees of 20% or more owners

Business guarantee

Generally, project assets being financed

Personal guarantees of 20% or more owners

Business guarantee

Best Use

Owner-occupied (at least 51%) real estate

Finance of Equipment with remaining life expectancy of 10-years or more

Short-term and long-term working capital

Purchase an existing business

Refinance non-real estate related existing business debt

Purchase FF&E

Real Estate


10% down payment!

Lowest rates of any government guaranteed business loan

Stretch debt over a long term to free up cash and working capital in the business

Long-term debt improves balance sheet ratios/credit picture to facilitate credit lines and other short-term loan if needed

Diversify your business investment – real estate provides stability during economic instability

Fees and closing costs are usually financed in the package

Short-term working capital

Popular product with banks

Higher fees and rates may incent banks to lend


Limitations on use: owner-occupied real estate, equipment and leasehold improvements

Higher rates than 504 loan program

Unpredictable future payments due to variable rates with typically no ceiling

More expensive debt can impede the business in the loan-term

Much higher down payment reduces business liquidity
Balloon payments can cause instability

Extra Tip

Ask the bank about the Real Estate Advantage (REAL or 504) Loan from Advantage CDC – otherwise they may not tell you about it

Rates are already rising from recent historical low levels

Do thorough price and options comparisons – just because you qualify doesn’t mean you got the best available loan product