Small Business Administration (SBA) 504 loans are provided through EDC Finance Corporation in conjunction with the United States Small Business Administration to assist growing businesses with long-term, fixed-rate financing for major fixed assets such as land, buildings, and equipment.


Key Benefits

  • 10, 20 or 25 year fixed rate options
  • Equity injection as low as 10%
  • Subordinate financing to primary lender

Funding Uses & Purposes

  • Land acquisition
  • Building construction \ expansion \ renovation
  • Long-term machinery & equipment
  • Soft costs related to above items
  • Commercial mortgage refinancing


Borrowers must be for-profit businesses or farms with a tangible net worth < $15 million and 2-year average net income < $5 million

Loan Structure

  • A commercial bank will provide senior financing for 50% of project costs
  • EDC Finance will provide an SBA 504 loan in a subordinate position for up to 40% of project costs
  • Borrower will provide a minimum 10% equity injection into the project


  • $5 million maximum loan amount for most borrowers up to 40% of project costs
  • $5.5 million maximum loan amount for manufactures & certain energy efficient projects up to 40% of project costs

Special purpose properties and new company loans reduce the maximum loan amount to no more than 30-35% of project costs

504-2-picks_01    504-2-picks_02


  • Market interest rate based on prevailing 5 & 10 year Treasury notes plus a fixed rate spread
  • 20 or 25 year fixed rate term for real estate
  • 10 year fixed rate term for machinery and equipment
  • 10% minimum equity requirement from borrower in the form of cash, real estate, or other loans

Special purpose properties and new company loans increase the minimum equity amount to 15-20% of project costs

Job Requirements

Borrowers are requested to create or retain 1 full time equivalent job per $75,000 borrowed ($120,000 for manufacturers), however, EDC Finance can often utilize excess jobs in its loan portfolio to meet the required ratio if a project alone does not have enough jobs

Closing Costs

  • 0.5% participation fee based on senior loan amount (out-of-pocket)
  • 2.7% commitment and underwriting fee (debenture funded)
  • $3,000 attorney and recording costs (debenture funded)
  • Title insurance is required for real estate transactions