Financing / Owner-users
The SBA 504
loan guide.
For Chicago business owners buying the building they operate from, the SBA 504 program can mean as little as 10% down and long-term fixed rates. Here is how it works.
The essentials / 01 — 06
Buy your building
with less down.
Program terms change and eligibility is determined by lenders and the SBA. Use this as an orientation, then confirm specifics with a lender.
Back to the buying guideWhat the SBA 504 loan is
The SBA 504 program helps small businesses buy owner-occupied commercial real estate with long-term, fixed-rate financing. It is designed for buyers who will operate their business from the property, not for passive investors.
How the financing is structured
A typical 504 deal has three parts: a bank or lender provides roughly 50% as a first mortgage, a Certified Development Company provides up to 40% backed by the SBA at a fixed rate, and the buyer contributes about 10% down. Startups and special-use properties may require 15–20% down.
Who qualifies
The business must be for-profit, operate in the United States, and meet SBA size standards — generally a tangible net worth under $15 million and average net income under $5 million after taxes. The business must occupy at least 51% of an existing building, or 60% of new construction.
What it can be used for
Purchasing existing buildings, land and new construction, renovating or improving facilities, and refinancing certain existing debt tied to owner-occupied real estate. It cannot be used for working capital, inventory, or purely investment property.
Why Chicago buyers use it
The lower down payment preserves cash for the business, and the SBA portion carries a long fixed term — often 20 or 25 years — which stabilizes occupancy costs. For owner-users comparing leasing versus buying in Chicago neighborhoods and suburbs, it can change the math considerably.
What to prepare
Lenders typically ask for business and personal financial statements, tax returns, a business plan or projections, and details on the property. Starting the conversation with a lender and a Certified Development Company early keeps the purchase timeline on track.
Considering an owner-user purchase?
Let's run the numbers.
Rosemary can help you compare leasing versus buying and identify properties that fit SBA 504 financing.