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SBA 504 Loan Program

The SBA 504 loan program is a long-term financing tool, designed to encourage economic development within a community. The SBA 504 Program accomplishes this by providing small businesses with long-term financing to acquire commercial real property with at least 51% of space as owner-occupied.

A Certified Development Company (CDC) is a private, nonprofit corporation which is set up to contribute to economic development within its community. CDCs work with SBA and GBC International Bank to provide financing to small businesses. Typically, a 504 program includes:

  • A loan secured from GBC International Bank with a senior lien covering up to 50 percent of the subject property’s appraised value.
  • A loan secured from a CDC (backed by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the appraised value.
  • A contribution from the borrower of at least 10 percent of the appraisal value.




To be eligible for a SBA 504 loan, your business must be operated for profit and fall within the size standards set by the SBA. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.



Generally, the real properties being financed are used as collateral. Personal guaranties of the principal owners are required. If the borrower is an Eligible Passive Company, corporate guaranties of the Operating Companies are also required.


Interest Rates and Fees

Interest rates on 504 loans (CDC portion) are pegged to an increment above the current market rate for 5-year and 10-year U.S. Treasury issues. Maturities of 10, 20 and 25 years are available. Fees total approximately 3 percent of the debenture and may be financed with the loan.


We have branches in California and Washington States to serve your financial needs.


For more details on the SBA 504 Loan program, please contact the SBA unit at SBA@gbcib.com. To apply for an SBA 504 Loan, please click here for the SBA forms.



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