How does an SBA 504 loan work?

An SBA 504 loan is a partnership between three parties: a private lender, a Certified Development Company (CDC), and the business borrower.

In many projects, financing is structured as:

• 50% from a conventional lender
• 40% through the SBA 504 program administered by the CDC
• 10% from the borrower as a down payment

Depending on the project and borrower qualifications, the required equity contribution may be higher.

This financing structure helps reduce risk for lenders while allowing eligible businesses to obtain long-term financing with a lower upfront investment than many conventional commercial loans. The SBA-backed portion of the financing carries a fixed interest rate, providing predictable monthly payments throughout the life of the loan.

From the initial conversation through closing, the lender and CDC work together to guide borrowers through the financing process and coordinate the documentation required for SBA approval.

What is a Certified Development Company (CDC)?

A Certified Development Company (CDC) is a nonprofit corporation certified by the U.S. Small Business Administration to administer the SBA 504 Loan Program.

CDCs partner with commercial lenders to help eligible businesses finance commercial real estate, heavy equipment, construction projects, and other long-term fixed assets. They also help determine project eligibility, prepare SBA documentation, coordinate the approval process, and guide borrowers through closing.

Unlike a traditional bank, a CDC specializes in the SBA 504 program. This focused expertise helps simplify the financing process for both borrowers and lending partners while ensuring projects comply with SBA program requirements.

The Economic Development Corporation of Jefferson County serves as a Certified Development Company for businesses throughout Missouri. Backed by more than 25 years of SBA 504 lending experience, our team works closely with borrowers and lenders to help move projects from concept to completion.

Does the SBA lend money directly to businesses?

No. Although the program is called an SBA 504 loan, the SBA does not lend money directly to business owners.

Instead, financing is provided through a partnership between a commercial lender and a Certified Development Company. The lender provides the first mortgage, while the CDC administers the SBA-backed portion of the financing. The SBA supports the program by guaranteeing the debenture that funds the CDC loan, making long-term, fixed-rate financing available to eligible businesses.

This partnership expands access to financing while helping lenders support projects that contribute to business growth and economic development.

Why does the SBA work with Certified Development Companies?

The SBA partners with Certified Development Companies because CDCs provide specialized expertise in commercial lending and economic development while serving businesses at the local and regional level.

Rather than managing every SBA 504 project directly, the SBA authorizes experienced nonprofit organizations to administer the program, ensuring borrowers receive personalized guidance throughout the financing process.

CDCs also build strong relationships with commercial lenders, helping coordinate financing, streamline communication, and ensure projects meet SBA eligibility requirements.

This collaborative approach benefits everyone involved by combining federal resources with local knowledge and experienced project guidance.

Why choose the Economic Development Corporation of Jefferson County for your SBA 504 loan?

Selecting the right Certified Development Company is an important part of a successful SBA 504 project.

Although the Economic Development Corporation of Jefferson County is headquartered in Jefferson County, our SBA 504 lending team proudly serves eligible businesses throughout Missouri. We work with commercial lenders across the state to help finance commercial real estate, construction projects, equipment purchases, and business expansions.

Our senior lending professionals bring more than 25 years of SBA 504 lending experience and understand the unique challenges that business owners and lenders face throughout the financing process. From your first conversation through loan closing, our goal is to provide knowledgeable guidance, responsive communication, and personalized service.

Whether you’re purchasing your first commercial property or expanding an established operation, we’re committed to helping Missouri businesses access the financing they need to invest in long-term success.

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SBA 504 Loan Eligibility Requirements

The SBA 504 Loan Program is designed to help eligible small businesses invest in long-term growth through financing for commercial real estate and equipment. While every project is unique, the following questions explain the basic eligibility requirements and what lenders consider during the financing process.

Who qualifies for an SBA 504 loan?

The SBA 504 Loan Program is available to many small businesses that are purchasing owner-occupied commercial real estate, constructing new facilities, renovating existing buildings, or financing eligible long-term equipment.

To qualify, a business must generally operate for profit, be owner-occupied for real estate, meet SBA size standards, and demonstrate the ability to repay the loan. The project must also meet SBA eligibility requirements and support the program’s economic development mission.

Eligibility is based on a combination of factors, including the financial strength of the business, the project being financed, and compliance with SBA guidelines. Because every business and project is different, the best way to determine eligibility is to discuss your plans with an experienced SBA 504 lending professional.

What types of businesses are eligible?

The SBA 504 Loan Program serves a wide range of industries throughout Missouri. Eligible borrowers often include manufacturers, contractors, healthcare providers, professional service firms, logistics companies, wholesalers, retailers, hospitality businesses, and many other privately owned businesses.

The program is intended for businesses investing in fixed assets that support long-term growth. Whether you’re expanding operations, purchasing your first commercial building, or replacing outdated equipment, the SBA 504 program may provide an affordable financing solution.

If you’re unsure whether your business qualifies, we’re happy to discuss your project and explain the program requirements.

Are startups eligible for an SBA 504 loan?

Yes. Startup businesses may qualify for SBA 504 financing, although additional requirements often apply.

Because startups have limited operating history, lenders typically evaluate factors such as the owners’ industry experience, available equity, business plan, financial projections, and overall project feasibility. Startup projects generally require a larger borrower equity contribution than established businesses.

A startup doesn’t automatically mean “no.” Many successful businesses have used SBA 504 financing to purchase or construct their first permanent location. The key is demonstrating a well-planned project and the ability to successfully operate the business.

Does my business have to be located in Jefferson County?

No. Although the Economic Development Corporation of Jefferson County is headquartered in Jefferson County, our Certified Development Company proudly provides SBA 504 financing to eligible businesses throughout Missouri.

We partner with commercial lenders across the state and regularly assist businesses in communities large and small. Whether your project is located in St. Louis, Springfield, Columbia, Cape Girardeau, Joplin, Kansas City, or anywhere in between, our experienced lending team can help determine whether the SBA 504 Loan Program is the right financing solution for your business.

Our commitment is simple: Statewide Reach. Local Expertise.

How does the SBA define a “small business”?

The SBA establishes size standards to determine whether a business qualifies for its financing programs. These standards vary by industry and may be based on factors such as annual revenue, number of employees, or other criteria established by the SBA.

Many businesses are surprised to learn they still qualify as a “small business” under SBA guidelines, even if they have dozens—or in some cases hundreds—of employees.

Because eligibility varies by industry, our lending team can help determine whether your business meets the current SBA size standards.

Do I need good credit to qualify?

While there is no single minimum credit score required for every SBA 504 loan, credit history is an important part of the overall lending decision.

Lenders and Certified Development Companies evaluate the complete financial picture, including business performance, cash flow, repayment history, management experience, and the strength of the project. A lower credit score does not automatically disqualify a borrower, just as an excellent credit score does not guarantee approval.

If you have questions about your situation, we encourage you to contact us before assuming you don’t qualify. Many financing decisions are based on the overall strength of the project rather than one factor alone.

Are women-owned, veteran-owned, and minority-owned businesses eligible?

Yes. The SBA 504 Loan Program is available to eligible businesses regardless of ownership demographics.

Women-owned, veteran-owned, minority-owned, and family-owned businesses regularly use SBA 504 financing to purchase commercial real estate, construct new facilities, and invest in equipment that supports long-term growth.

Eligibility is based on SBA program requirements and the financial strength of the project rather than the owner’s background.

Can an LLC qualify for an SBA 504 loan?

Yes. Many SBA 504 borrowers are organized as Limited Liability Companies (LLCs).

Corporations, partnerships, and other eligible for-profit business entities may also qualify, provided they meet SBA eligibility requirements and the project satisfies program guidelines.

If you’re still determining the best legal structure for your business, it’s a good idea to discuss your plans with your attorney, accountant, and lending team before beginning the financing process.

Are nonprofit organizations eligible?

In most cases, nonprofit organizations are not eligible for SBA 504 financing because the program is intended for for-profit small businesses.

However, nonprofit organizations may qualify for other financing programs or economic development resources depending on their mission and project. If you’re unsure whether your organization qualifies, we’re happy to discuss your goals and help identify available options.

What if I’m not sure whether my business qualifies?

You don’t need to have all the answers before contacting us.

One of the first steps in the SBA 504 process is simply having a conversation about your business, your project, and your financing goals. Our experienced lending team can help determine whether the SBA 504 Loan Program is a good fit, explain any program requirements, and answer your questions before you begin the application process.

Even if the SBA 504 program isn’t the right solution for your project, we’ll do our best to point you toward other resources that may better meet your needs.

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Eligible Uses for SBA 504 Loans

The SBA 504 Loan Program is designed to finance long-term fixed assets that help businesses grow. Whether you’re purchasing your first commercial property, expanding your operations, or investing in new equipment, understanding what can and cannot be financed is an important first step.

Can I purchase commercial real estate with an SBA 504 loan?

Yes. Purchasing owner-occupied commercial real estate is one of the most common uses of the SBA 504 Loan Program.

Businesses use SBA 504 financing to purchase office buildings, manufacturing facilities, warehouses, medical offices, retail space, industrial buildings, and other commercial properties that support their operations.

Owning your facility can provide long-term stability, build equity over time, and protect your business from rising lease costs. Many business owners also find that owning their building gives them greater flexibility to renovate, expand, or customize the space as their business grows.

Can I build a new commercial building?

Yes. SBA 504 financing may be used to construct new commercial buildings that will be occupied by your business.

Construction projects often include the purchase of land, site preparation, utility improvements, parking areas, landscaping, and other eligible costs associated with developing the property.

Whether you’re building your first facility or constructing a larger building to support future growth, the SBA 504 program can provide long-term financing that helps make major construction projects more affordable.

Can I renovate or expand an existing building?

Absolutely.

Many businesses use SBA 504 financing to modernize existing facilities, increase production capacity, improve customer experience, or create additional office and warehouse space.

Eligible improvements may include building additions, structural renovations, HVAC systems, roofing, electrical upgrades, plumbing improvements, accessibility enhancements, and other permanent improvements that increase the value or functionality of the property.

Renovating an existing facility can often be a cost-effective alternative to relocating while providing the additional space needed for future growth.

Can I purchase equipment with an SBA 504 loan?

Yes. The SBA 504 Loan Program may be used to finance eligible long-term machinery and equipment with a useful life of at least 10 years.

Many businesses use SBA 504 financing to purchase manufacturing equipment, medical equipment, printing presses, agricultural processing equipment, distribution equipment, and other specialized machinery essential to business operations.

Financing equipment with a long-term, fixed-rate loan can help businesses preserve cash while investing in productivity, efficiency, and future growth.

Can project costs beyond the building or equipment be financed?

Yes.

Many project-related expenses may be included in an SBA 504 loan. Depending on the project, eligible costs may include appraisals, environmental reports, architectural and engineering fees, construction interest, certain closing costs, and other expenses directly related to the project. Including eligible project costs in the financing can help reduce out-of-pocket expenses and simplify the overall financing process.

Can I refinance existing debt with an SBA 504 loan?

In certain situations, yes.

The SBA has established programs that allow eligible businesses to refinance qualified commercial real estate debt through the SBA 504 program. Refinancing may help businesses secure a long-term fixed interest rate, improve cash flow, or support future expansion.

Because refinance eligibility depends on several factors, it’s important to discuss your existing financing with an experienced SBA 504 lender to determine whether your project qualifies.

What cannot be financed through the SBA 504 program?

The SBA 504 Loan Program is intended for long-term fixed assets and is not designed to finance working capital, inventory, or speculative real estate investments.

Projects must support an operating business rather than investment or passive income activities. Certain assets and business activities may also be ineligible under SBA program guidelines.

If you’re unsure whether your project qualifies, we encourage you to contact our lending team early in the planning process. A brief conversation can often answer questions and help identify the best financing solution.

What if my project is unique?

No two business expansion projects are exactly alike.

Whether you’re combining real estate with equipment purchases, expanding in phases, or planning a specialized facility, our lending team can help evaluate your project and explain how the SBA 504 program may fit your financing needs.

With more than 25 years of SBA 504 lending experience and projects completed throughout Missouri, we’ve worked with businesses across a wide range of industries and understand that every project has its own goals, challenges, and opportunities.

If your project doesn’t fit neatly into one category, don’t assume it isn’t eligible. We’re happy to discuss your plans and help determine the best path forward.

SBA 504 Loan Eligible Uses at a Glance

✔ Purchase owner-occupied commercial real estate
✔ Construct a new commercial building
✔ Renovate or expand an existing facility
✔ Purchase eligible long-term machinery and equipment
✔ Finance many project-related costs
✔ Business acquisitions that are largely real estate
✔ Refinance eligible commercial real estate debt (when program requirements are met)
✔ Projects are evaluated individually

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SBA 504 Loan Structure & Terms

One of the biggest advantages of the SBA 504 Loan Program is its financing structure. By combining a conventional loan with an SBA-backed loan, businesses can often reduce their upfront investment while securing long-term, fixed-rate financing for commercial real estate and equipment.

How is an SBA 504 loan structured?

The SBA 504 Loan Program uses a three-party financing structure that brings together a commercial lender, a Certified Development Company (CDC), and the borrower.

In a typical project:

• 50% is financed by a commercial lender.
• 40% is financed through the SBA 504 program by the Certified Development Company.
• 10% is contributed by the borrower as a down payment.

This structure allows businesses to finance major investments while preserving working capital for operations, hiring, inventory, and future growth.

Depending on the project, some borrowers may be required to contribute a larger down payment.

Why is the SBA 504 financing structure different from a conventional loan?

Traditional commercial loans are typically financed by a single lender and often require larger down payments, shorter repayment terms, or variable interest rates. Conventional loans also include covenants that limit your operating freedom and allow a lender to call your loan before maturity. They also come with a balloon that means you will need to prove your creditworthiness every three to five years. That’s a risk, especially given uncertain economic conditions.

The SBA 504 program shares the financing responsibility between a commercial lender and a Certified Development Company. This structure helps reduce lender risk while providing businesses with access to affordable, long-term financing.

For many borrowers, the result is a lower upfront cash investment and more predictable monthly payments than they might receive through conventional financing alone. The certainty in knowing a portion of your loan payment will remain steady gives a great deal of peace of mind.

How much is the required down payment on an SBA 504 Loan?

Many SBA 504 projects require as little as a 10% borrower contribution.

However, some projects require a 15% or 20% down payment, depending on factors such as:

• Whether the borrower is a new business
• Whether the property is considered a special-purpose property
• Other SBA program requirements

Your lender and Certified Development Company will explain the required equity contribution based on your specific project.

Are SBA 504 interest rates fixed?

Yes. One of the program’s greatest advantages is that the SBA portion of the loan carries a long-term fixed interest rate.

Because the rate remains fixed for the life of the loan, borrowers benefit from predictable monthly payments and protection from future interest rate increases.

The commercial lender’s portion of the financing may have different terms depending on the lender and loan structure.

What loan terms are available?

SBA 504 loans are available with repayment terms of:

• 10 years
• 20 years
• 25 years

The appropriate term depends on the type of project and current SBA program guidelines.

Longer repayment terms can help reduce monthly payments and improve cash flow while allowing businesses to invest in future growth.

How are SBA 504 interest rates determined?

The SBA portion of the loan is funded through the sale of SBA-backed debentures.
Interest rates are established at the time of the CDC’s funding and are influenced by market conditions, including long-term U.S. Treasury rates.

Current rates change monthly. We publish updated SBA 504 effective rates on our website.
If you’re considering a project, our team can provide current rate information and explain how rates may affect your financing.

Are there prepayment penalties?

The SBA 504 loan includes a declining prepayment premium during the early years of the loan.

This premium decreases over time and eventually expires. The specific schedule depends on the loan term and current SBA program requirements.

If you’re considering paying off your loan early or refinancing in the future, our team can explain how the prepayment premium may apply to your specific loan.

How much can I borrow?

The amount you can borrow depends on several factors, including:

• The total project cost
• Your business’s financial strength
• SBA program eligibility
• The commercial lender’s participation
• Current SBA lending limits

Every project is evaluated individually. Our lending team will work with you and your lender to determine the financing structure that best supports your project.

What is the maximum SBA 504 loan amount?

The SBA portion of a 504 loan can generally finance up to $5 million.

Certain manufacturing businesses and projects that meet specific public policy goals may qualify for financing up to $5.5 million under current SBA guidelines.

If your project exceeds these limits, additional financing options may still be available. Our team can discuss how larger projects are commonly structured.

SBA 504 Loan Snapshot | Loan Structure & Terms

✔ Typical financing structure of 50% Bank / 40% SBA / 10% Borrower
✔ Down payments may be as low as 10%
✔ Long-term, fixed-rate SBA financing
✔ Loan terms of 10, 20, or 25 years
✔ Existing equity may count toward your contribution
✔ Financing customized to each project

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The Application Process

Applying for an SBA 504 loan doesn’t have to be complicated. Our experienced lending team works closely with you and your lender throughout the process, helping you understand each step and keeping your project moving forward. While every project is unique, the following questions provide an overview of what you can expect.

How do I get started?

The first step is simply contacting our SBA 504 lending team to discuss your project.

We’ll learn more about your business, your financing goals, and the project you’re planning. During this initial conversation, we’ll determine whether the SBA 504 Loan Program appears to be a good fit and explain the financing process from start to finish.

You don’t need to have every detail finalized before reaching out. In fact, involving our team early often helps identify financing opportunities and avoid potential delays later in the project.

What information will I need to apply?

The documentation required for an SBA 504 loan is similar to what many lenders request for a commercial loan.

Depending on your project, information may include:

• Business financial statements
• Business and personal tax returns
• Personal financial statements
• A project summary or business plan
• Information about the property or equipment being financed
• Purchase agreements or construction estimates
• Organizational documents for the business

Our team will explain exactly what is needed for your project and help guide you through the documentation process.

How long does the SBA 504 loan process take?

Every project is different, but many SBA 504 loans move from application to closing within several weeks to a few months.

The overall timeline depends on factors such as:

• How quickly documentation is provided
• Property appraisals
• Environmental reviews
• Construction timelines (when applicable)
• Coordination between the borrower, lender, and other project partners

Our goal is to keep your project moving efficiently by maintaining clear communication throughout the process.

What happens after I submit my application?

Once your application is received, our team begins reviewing the project and working with your lender to gather any additional information needed.

We’ll evaluate eligibility and coordinate the required documentation. From there, it is a two-step process. First, we will get approval from the CDC, then submit it to the SBA for approval.

Throughout the process, you’ll have a dedicated point of contact who can answer questions and keep you informed about the status of your loan.

Will I need an appraisal?

Many commercial real estate projects require an independent appraisal to establish the property’s market value.

The appraisal helps ensure the financing is appropriate for the project and satisfies lender and SBA requirements.

If an appraisal is needed, we’ll explain the process and help coordinate the required documentation.

Will my project require an environmental review?

Some projects require environmental due diligence as part of the financing process.

The type of review depends on factors such as the property’s history, previous land use, and the nature of the project.

Environmental reviews help identify potential concerns before financing is completed and are a standard part of many commercial real estate transactions.

If your project requires an environmental report, we’ll explain the requirements and help guide you through the process.

What happens after my loan is approved?

After CDC and SBA approval, the project moves toward closing.

During this stage, remaining documentation is finalized, financing is coordinated with your lender, and any outstanding project requirements are completed.

Our team continues working with all parties involved to help ensure a smooth closing and funding process.

Can I apply before I find a property?

You do not need to wait until you have identified a specific property to start the conversation.

Many business owners begin exploring SBA 504 financing while they are still evaluating properties or planning a future purchase. An early conversation with our lending team can help you understand how SBA 504 financing may fit your project, establish a realistic budget, and prepare for the information that will be needed as the project moves forward.

However, a specific property will need to be identified before the SBA 504 loan process can progress beyond certain stages. The property and project details are an important part of determining eligibility and structuring the financing.

Starting the conversation early can help you understand your options and be better prepared to move forward when the right property becomes available.

What if my project changes during the process?

Business projects evolve, and changes are not uncommon.

If your project scope, timeline, costs, or financing needs change, let us know as soon as possible. Our team will review the changes with you and your lender to determine whether additional documentation or approvals are needed.

Early communication helps prevent unnecessary delays and keeps your project moving forward.

Will someone guide me through the process?

Absolutely.

One of the benefits of working with the Economic Development Corporation of Jefferson County is having experienced SBA 504 professionals available to answer questions throughout your project.

From your first conversation through loan closing, our team works closely with you and your lender to explain each step, coordinate documentation, and provide responsive support throughout the financing process.

We believe informed borrowers make confident decisions, and we’re committed to making the SBA 504 process as straightforward as possible.

SBA 504 Snapshot | The Application Process

✔ Start with a conversation
✔ Receive guidance on eligibility
✔ Gather required documentation
✔ Work with your lender and EDC
✔ Complete SBA review and approval
✔ Close your loan and begin your project

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Working with Your Bank

The SBA 504 Loan Program is built on partnership. Commercial lenders, Certified Development Companies (CDCs), and business owners each play an important role in the financing process. One of the strengths of the SBA 504 program is that businesses can often continue working with the bank they already know and trust.

Can I work with my current bank?

Yes. In fact, most SBA 504 projects involve the borrower’s existing bank or commercial lender.

The SBA 504 program is designed as a partnership between a commercial lender and a Certified Development Company (CDC). If you already have a banking relationship, we’ll work directly with your lender throughout the financing process.

If you don’t currently have a lender, we’re happy to introduce you to banks throughout Missouri that actively participate in the SBA 504 Loan Program.

Does my bank have to be located in Jefferson County?

No.

The Economic Development Corporation of Jefferson County partners with commercial lenders throughout Missouri. Your lender does not need to be located in Jefferson County to participate in an SBA 504 project with our Certified Development Company.

We regularly work with community banks, regional banks, and national financial institutions serving businesses across the state.

What if my bank has never completed an SBA 504 loan?

That’s perfectly okay.

Many lenders work with SBA 504 financing only occasionally, and our experienced lending team is here to help guide the process.

We’ll work closely with your lender to explain program requirements, coordinate documentation, answer questions, and help keep the project moving efficiently.

Our goal is to make the financing process straightforward for both borrowers and lenders.

Can the Economic Development Corporation of Jefferson County recommend a lender?

Yes.

If you don’t already have a banking relationship, we can help connect you with commercial lenders that participate in SBA 504 financing throughout Missouri.

Our goal is to help you find a financing partner that understands your project and is a good fit for your business.

The decision is always yours, and we’re happy to work with the lender you choose.

Does EDC replace my bank?

No.

The Economic Development Corporation of Jefferson County works with your bank—not instead of your bank.

In a typical SBA 504 project, the commercial lender provides approximately 50% of the financing while EDC administers the SBA-backed portion of the loan.

This partnership allows businesses to benefit from both a trusted lending relationship and the advantages of the SBA 504 program.

Why do banks participate in the SBA 504 Loan Program?

The SBA 504 structure helps commercial lenders support business expansion projects while managing lending risk.

By partnering with a Certified Development Company, banks can often provide financing solutions that may not be possible through conventional lending alone.

The program also helps lenders strengthen relationships with existing customers while supporting business growth within the communities they serve.

How does EDC work with lenders during the loan process?

Our lending team works closely with the commercial lender from the beginning of the project through closing.

Responsibilities include coordinating SBA documentation, communicating project updates, assisting with eligibility questions, and helping ensure the financing process stays on track.

Our goal is to make the SBA 504 process as efficient and collaborative as possible for everyone involved.

Can my bank refer clients to EDC?

Absolutely.

Many commercial lenders refer clients to the Economic Development Corporation of Jefferson County when an SBA 504 loan may be an appropriate financing solution.

We value these relationships and work alongside lending partners to provide responsive communication, knowledgeable guidance, and a smooth financing experience for shared customers.

Our role is to complement, not compete with, our lending partners.

Why do lenders choose to work with EDC?

Commercial lenders choose to work with EDC because of our experience, responsiveness, and commitment to partnership.

Our senior lending professionals bring more than 25 years of SBA 504 lending experience and understand the importance of clear communication, timely project coordination, and exceptional customer service. Whether we’re assisting a first-time SBA lender or a long-time lending partner, our focus is on helping projects move efficiently while providing an outstanding experience for both the borrower and the bank.

What if I have questions before talking with my bank?

That’s perfectly fine.

Many borrowers contact us before meeting with a lender to better understand the SBA 504 program and determine whether it fits their project.

We’re happy to answer your questions, explain how the financing works, and help you prepare for conversations with your bank.

Whether you’re still exploring options or ready to move forward, our team is here to help.

SBA 504 Snapshot | Working with Your Bank

✔ Continue working with your existing lender
✔ EDC partners with banks throughout Missouri
✔ We help guide lenders through the SBA 504 process
✔ Community, regional, and national banks participate
✔ We complement your banking relationship—we don’t replace it

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Comparing Financing Options

Every business has unique financing needs, and the SBA 504 Loan Program is one of several options available to business owners. Understanding the differences between financing programs can help you choose the solution that best supports your long-term business goals.

What is the difference between an SBA 504 loan and an SBA 7(a) loan?

While both programs are backed by the U.S. Small Business Administration, they serve different purposes.

The SBA 504 Loan Program is designed primarily for long-term fixed assets such as commercial real estate, construction projects, and major equipment purchases. It offers long-term, fixed-rate financing on the SBA portion of the loan.

The SBA 7(a) Loan Program is more flexible and may be used for a wider variety of business needs, including working capital, inventory, business acquisitions, equipment, and certain real estate purchases.

If your primary goal is purchasing commercial property or long-term equipment, the SBA 504 program is often the better fit. If you need working capital or more flexible financing, an SBA 7(a) loan may be more appropriate.

Should I choose an SBA 504 loan or a conventional commercial loan?

That depends on your project and business goals. Many businesses choose the SBA 504 program because it may offer:

• Lower down payment requirements
• Long-term fixed interest rates
• Longer repayment terms
• The opportunity to preserve working capital

Conventional financing may be a better choice for projects that don’t meet SBA eligibility requirements or when different financing structures are needed. Our lending team can help you compare both options and determine which best supports your project.

Is it better to lease or purchase commercial real estate?

There isn’t a one-size-fits-all answer, but many growing businesses eventually find that owning their facility provides significant long-term advantages. Purchasing commercial real estate allows businesses to build equity, stabilize occupancy costs, and gain greater control over future expansion and property improvements. Leasing may offer greater flexibility for businesses that anticipate relocating or have uncertain long-term space needs. The right decision depends on your financial goals, growth plans, and business strategy.

Why do businesses choose the SBA 504 Loan Program?

Business owners often choose the SBA 504 program because it combines affordable financing with long-term stability.
Common benefits include:

• Long-term fixed interest rates
• Lower down payments for many projects
• Predictable monthly payments
• Commercial real estate ownership
• Preservation of working capital
• Financing for major business investments

For businesses planning long-term growth, these advantages can provide both financial stability and flexibility.

Can I use an SBA 504 loan instead of paying cash?

Many businesses could pay cash for a project, but choose not to. Using financing instead of cash allows business owners to preserve capital for hiring, inventory, technology investments, marketing, and unexpected opportunities.
Maintaining healthy cash reserves is often an important part of a long-term business strategy.

The SBA 504 program gives businesses another financing option that may allow them to invest in growth while maintaining financial flexibility.

Is an SBA 504 loan only for large businesses?

No.

Many small and growing businesses successfully use SBA 504 financing to purchase their first commercial building or invest in equipment that supports expansion. Whether you’re purchasing a 5,000-square-foot office or building a new manufacturing facility, the SBA 504 program is designed to support businesses that are investing in long-term growth.

Which financing option has the lowest monthly payment?

Monthly payments vary depending on the financing structure, interest rate, loan amount, and repayment term.
Because the SBA portion of the 504 loan offers long repayment terms and fixed interest rates, many borrowers find that monthly payments compare favorably to other financing options.

The best way to compare financing options is to review your specific project with your lender and Certified Development Company.

Can the Economic Development Corporation of Jefferson County help me compare financing options?

Absolutely.

One of our roles is helping business owners understand the financing solutions available to them.
If the SBA 504 program is the right fit, we’ll guide you through the process. If another financing option better supports your goals, we’ll explain the differences so you can make an informed decision.

Our goal isn’t simply to close loans—it’s to help Missouri businesses make smart long-term financing decisions.

How do I know if the SBA 504 Loan Program is right for me?

If your project involves purchasing commercial real estate, constructing a new facility, renovating an existing building, or financing long-term equipment, the SBA 504 program is worth exploring.

Every project is different, which is why we encourage business owners to have a conversation with our lending team early in the planning process.

We’ll help evaluate your project, answer your questions, and explain whether the SBA 504 program is the best financing solution for your goals.

SBA 504 Snapshot | Comparing Financing Options

✔ SBA 504 is designed for commercial real estate and major equipment
✔ SBA 7(a) offers greater flexibility for working capital and other business needs
✔ SBA 504 provides long-term, fixed-rate financing
✔ Many businesses choose SBA 504 to preserve working capital
✔ Every financing decision should be based on your business goals

Compare Your Financing Options

FEATURE	SBA 504	SBA 7(a)	CONVENTIONAL LOAN
Commercial Real Estate	✅	✅	✅
Working Capital	❌	✅	Sometimes
Equipment	✅	✅	✅
Fixed Interest Rate	✅ (SBA Portion)	Varies	Varies
Down Payment	Often Lower	Varies	Varies
Long-Term Financing	✅	Often	Varies

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Missouri SBA 504 Lending

While the Economic Development Corporation of Jefferson County is headquartered in Jefferson County, our Certified Development Company proudly provides SBA 504 financing to eligible businesses throughout Missouri. We partner with borrowers, commercial lenders, and economic development organizations across the state to help businesses invest, expand, and succeed.

Does EDC only provide SBA 504 loans in Jefferson County?

No.

Although our organization is based in Jefferson County, our Certified Development Company provides SBA 504 financing to eligible businesses throughout Missouri.

We proudly work with borrowers and lending partners across the state, helping finance projects ranging from commercial real estate purchases and new construction to major equipment investments and business expansions. Our lending footprint extends statewide while maintaining the personalized service and local relationships that have defined our organization for decades.

What does “Statewide Reach. Local Expertise.” mean?

Our tagline reflects the way we do business.

Statewide Reach means we proudly serve businesses and lending partners throughout Missouri—not just in Jefferson County.

Local Expertise means every project receives personalized attention from experienced SBA 504 professionals who understand Missouri’s business community, lending environment, and economic development landscape.

No matter where your business is located, you’ll work with people who are committed to helping you navigate the financing process with confidence.

Why do businesses throughout Missouri choose EDC?

Businesses choose EDC because they want an experienced lending partner that provides knowledgeable guidance, responsive communication, and personalized service throughout the SBA 504 process.

Our team understands that financing a commercial building or expansion project is one of the largest investments a business owner will make. We take the time to understand your goals, answer your questions, and help move your project efficiently from application to closing.

Our mission is simple: help Missouri businesses invest with confidence.

How much SBA 504 experience does EDC have?

Our senior lending professionals bring more than 25 years of SBA 504 lending experience.

That experience matters.

Over the years, we’ve helped businesses across Missouri finance projects in manufacturing, healthcare, professional services, distribution, retail, construction, and many other industries. Our experience allows us to anticipate questions, identify opportunities, and help borrowers and lenders navigate the financing process with confidence.

Do you work with banks throughout Missouri?

Yes.

We proudly partner with commercial lenders across Missouri, including community banks, regional banks, and national financial institutions.

Many of these relationships have been built over years of successfully working together on SBA 504 projects.

Whether your lender has completed dozens of SBA 504 loans or is participating for the first time, our team works collaboratively to provide a smooth financing experience.

Why is experience important when choosing a Certified Development Company?

Every SBA 504 project is different.

Experienced lending professionals understand how to navigate unique projects, communicate effectively with lenders, coordinate documentation, and help borrowers understand each step of the process.

Choosing a Certified Development Company with extensive SBA 504 experience can provide added confidence throughout the financing process and help ensure questions are addressed promptly and professionally.

What industries does EDC commonly serve?

We work with businesses across a wide range of industries throughout Missouri.

Common projects include:

• Manufacturing
• Healthcare
• Professional services
• Distribution and logistics
• Construction
• Retail
• Hospitality
• Automotive
• Agricultural processing
• Technology and other growing industries

Every eligible business has unique financing needs, and we’re committed to helping businesses across Missouri identify the financing solution that best supports their goals.

Is EDC a bank?

No.

The Economic Development Corporation of Jefferson County is a nonprofit Certified Development Company (CDC), not a commercial bank.

Our role is to administer the SBA-backed portion of the SBA 504 Loan Program while partnering with commercial lenders throughout Missouri.

Because our focus is SBA 504 financing, our team brings specialized knowledge and experience to every project.

What makes EDC different?

Our difference isn’t one thing. It’s the combination of statewide service, highly experienced professionals, strong lender relationships, and a commitment to personalized guidance.

We believe financing should be collaborative, transparent, and focused on helping businesses make informed long-term decisions.

Whether you’re purchasing your first commercial property or leading a major expansion project, our team is committed to helping you succeed.

SBA 504 Snapshot | Missouri SBA 504 Lending

✔ Proudly serving businesses throughout Missouri
✔ More than 25 years of SBA 504 lending experience
✔ Strong relationships with lenders across the state
✔ Personalized guidance from application through closing
✔ A mission-driven Certified Development Company focused on business growth

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Getting Started

Whether you’re exploring financing options or ready to move forward with a commercial real estate or equipment project, the first step is simply starting the conversation. Our experienced SBA 504 lending team is here to answer your questions, explain your options, and help you determine whether the SBA 504 Loan Program is the right fit for your business.

What is the first step in applying for an SBA 504 loan?

The first step is contacting our SBA 504 lending team to discuss your project.

We’ll learn about your business, your financing goals, and the project you’re considering. During this initial conversation, we’ll explain how the SBA 504 Loan Program works, discuss your financing options, and answer any questions you may have.

You don’t need to have every detail finalized before reaching out. In fact, involving our team early often helps businesses make more informed decisions and avoid unnecessary delays later in the process.

What if I’m still exploring my options?

That’s perfectly okay.

Many business owners contact us long before they purchase property, select equipment, or begin construction.

Our role is to help you understand your financing options so you can make informed decisions when the time is right. There is no obligation to apply simply because you’ve asked questions.

Whether you’re comparing financing programs or beginning to plan for future growth, we’re happy to be a resource.

Do I need to have a property under contract before contacting EDC?

No.

In many cases, it’s beneficial to contact us before entering into a purchase agreement or beginning construction.

An early conversation allows us to explain program requirements, discuss project eligibility, and help you understand what documentation may be needed.

Planning ahead can often make the financing process smoother and help you move more confidently when the right opportunity becomes available.

Can I talk with someone before completing an application?

Absolutely.

In fact, we encourage it.

Every business project is unique, and a brief conversation with our lending team can often answer important questions before you invest significant time in the application process.

We’re here to provide guidance—not pressure.

What should I prepare before our first conversation?

While you don’t need to have everything ready, it can be helpful to think about:

• Your business and industry
• The project you’re planning
• Estimated project costs
• Your financing goals
• Your project timeline
• Whether you’ve selected a lender

Don’t worry if you don’t have all of the answers. We’ll help guide the conversation and explain what information will be needed as your project moves forward.

What happens after I contact EDC?

Once we understand your project, we’ll explain the next steps based on your specific financing needs.

That may include discussing eligibility, gathering documentation, coordinating with your lender, or preparing your SBA 504 application. Throughout the process, you’ll work with experienced professionals who are committed to providing responsive communication and personalized guidance.

Why should I contact EDC early in the process?

One of the biggest advantages of contacting us early is having experienced SBA 504 professionals available before important financing decisions are made.

Early planning can help identify financing opportunities, answer eligibility questions, coordinate with your lender, and establish realistic expectations for your project timeline. Our goal is to help your project move forward as efficiently as possible.

Is there an obligation to apply after contacting EDC?

No.

We understand that every business is different, and not every project will ultimately use SBA 504 financing.

Our initial conversations are educational and designed to help you understand your options. If another financing solution is a better fit for your project, we’ll tell you.

Our priority is helping Missouri businesses make informed financing decisions.

How do I contact the SBA 504 lending team?

Our experienced lending professionals are available to answer your questions and discuss your project.

Whether you’re purchasing commercial real estate, financing equipment, expanding operations, or simply exploring your options, we’re here to help.

We proudly serve businesses throughout Missouri and look forward to learning more about your project.

SBA 504 Snapshot | Getting Started

✔ Contact our lending team
✔ Discuss your project
✔ Understand your financing options
✔ Determine eligibility
✔ Gather documentation
✔ Begin your SBA 504 journey with confidence

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Ready to Start the Conversation?

Whether your project is six months away or already underway, our experienced SBA 504 lending professionals are here to help.

Statewide Reach. Local Expertise.

Contact the Economic Development Corporation of Jefferson County to discuss your project, ask questions, and learn how the SBA 504 Loan Program can support your business goals.

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