SBA 7(a) vs SBA 504: which one fits?

Two SBA programs, two different jobs. 7(a) is the flexible one. 504 is the cheap one for fixed assets. Choosing wrongly costs either flexibility or a lot of interest.

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Side by side

The differences that actually cost money.

	SBA 7(a)	SBA 504
Maximum	$5M	$5.5M SBA portion, larger total project
Use of funds	Working capital, acquisition, refinance, real estate	Owner-occupied real estate and heavy equipment only
Rate type	Usually variable, tied to prime	Fixed on the SBA portion
Term	10 years, 25 for real estate	20–25 years on real estate
Down payment	10–20%	Typically 10%
Structure	One lender, SBA guaranteed	Bank plus a Certified Development Company

Ranges are typical outcomes across our lender network, not quotes. Your file sets the real terms.

Choose sba 7(a) when

SBA 7(a) is the right call

You need working capital in the mix
You are buying a business, not just a building
You want one lender and one closing

SBA 7(a) details

Choose sba 504 when

SBA 504 is the right call

You are buying or building owner-occupied property
You want a long fixed rate
The project includes heavy, long-life equipment

SBA 504 details

Our verdict

What we would tell you on the phone.

Buying a business: 7(a). Buying a building you will occupy: 504, almost always, because the fixed rate over 25 years beats everything else available. Sometimes the right answer is both, side by side.

Have us price both Run the numbers yourself

Comparison questions

What people ask next.

Yes. A common structure funds the property under 504 and working capital or goodwill under 7(a). It takes coordination but it is done regularly.

Your business must occupy at least 51% of an existing building, or 60% of new construction. Pure investment property does not qualify — that is a conventional or DSCR loan.

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When your bank says no. We find who says yes.

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Funding programs

SBA 7(a) vs SBA 504: which one fits?

The differences that actually cost money.

SBA 7(a) is the right call

SBA 504 is the right call

What we would tell you on the phone.

What people ask next.

Other decisions worth getting right.

Working capital vs Line of credit

SBA 7(a) vs Conventional term loan

Invoice factoring vs Line of credit

Revenue-based advance vs Working capital loan

Equipment financing vs Equipment leasing

Term loan vs Line of credit

When your bank says no. We find who says yes.