Current SBA 504 Loan Rates 2026: Debenture Rates, Fees & What You'll Actually Pay

How SBA 504 Loan Rates Work

SBA 504 loans are not priced like conventional commercial mortgages. The interest rate a borrower pays is a composite of several components and understanding each piece is essential to comparing offers accurately. The 504 program is a partnership between a Certified Development Company (CDC), a conventional lender and the borrower. And each party has its own cost layer.

The SBA 504 debenture rate is set monthly based on U.S. Treasury bond yields at the time of the debenture sale. The SBA pools approved loans and sells debentures (bonds) to investors on a fixed schedule. The rate locks at the time of the debenture sale, not at the time of loan approval. This means borrowers face a period of rate uncertainty between approval and funding.

The SBA 504 program page provides official program details, though current debenture rates are published through CDCs and the SBA's debenture sales calendar.

Current SBA 504 Debenture Rates. 2026

The following rates reflect the most recent SBA 504 debenture sale and represent the base debenture coupon rate before fees are added:

Term Length	Debenture Rate	Effective Rate (est.)
10-year	4.87%	5.50% – 5.75%
20-year	5.24%	5.90% – 6.20%
25-year	5.41%	6.10% – 6.40%

The gap between the debenture rate and the effective rate reflects the CDC servicing fee, the SBA guarantee fee and a Central Servicing Agent (CSA) fee.

Fee Breakdown: What Gets Added to the Debenture Rate

SBA 504 borrowers pay several fees that are either rolled into the effective rate or charged upfront:

• CDC servicing fee. Typically 0.625% to 1.0% annually, added to the debenture rate to arrive at the effective rate
• SBA guarantee fee. Approximately 0.50% of the debenture, charged once and typically financed into the loan
• CDC processing fee. Varies by CDC, commonly 1.0% to 1.5% of the SBA loan amount, paid at closing
• CSA fee. 0.1% annually for the Central Servicing Agent, included in the effective rate
• Funding fee. 0.25% to 0.50%, charged at funding

SBA 504 Loan Maximum Amounts in 2026

The SBA 504 loan covers a portion of the total project cost. The standard structure is:

Component	Percentage	Source
First mortgage	50%	Conventional lender (bank)
SBA 504 debenture	40%	CDC / SBA
Borrower equity	10%	Borrower down payment

Maximum SBA 504 loan amounts (the CDC/SBA portion) are:

• $5 million. Standard projects
• $5.5 million. Manufacturing projects and certain energy-related projects
• $5.5 million. Small manufacturers (NAICS codes in sector 31-33)

What Can SBA 504 Loans Be Used For?

The 504 program is designed specifically for long-term fixed assets. Eligible uses include:

• Commercial real estate purchase. Buying an existing building for business use
• New construction. Building a new facility from the ground up
• Major renovations. Substantial improvements to existing facilities
• Heavy machinery and equipment. Equipment with a useful life of at least 10 years
• Land and site improvements. Grading, utilities, parking lots, landscaping

The 504 program cannot be used for working capital, inventory, debt refinancing (with limited exceptions), or business acquisitions that do not include real estate.

Real Cost Example: $1.5 Million Building Purchase

Here is what a $1.5 million commercial real estate purchase might look like using an SBA 504 loan in 2026:

Component	Amount	Rate / Notes
Bank first mortgage (50%)	$750,000	~7.5% variable (Prime + 1.0%)
SBA 504 debenture (40%)	$600,000	~6.1% fixed, 20-year term
Borrower equity (10%)	$150,000	Cash at closing
Closing costs (approx.)	$18,000 – $25,000	CDC fees, SBA guarantee, legal, appraisal
Monthly payment (est.)	~$9,600	Combined bank + SBA portions

This monthly payment compares favorably to a conventional commercial mortgage for the full $1.35 million (after 10% down), which at 7.5% over 20 years would cost approximately $10,900 per month. The blended rate advantage of the 504 program saves roughly $1,300 per month. Or $15,600 annually.

SBA 504 vs SBA 7(a): Which Loan Is Right?

Feature	SBA 504	SBA 7(a)
Max loan amount	$5M – $5.5M	$5M
Rate type	Fixed (SBA portion)	Variable or fixed
Primary use	Real estate, heavy equipment	General purpose, working capital
Down payment	10% (sometimes 15%–20%)	10%–30% depending on use
Max term	10, 20, or 25 years	25 years (real estate), 10 years (other)
Occupancy requirement	51% owner-occupied (existing), 60% (new)	None for most uses

Choose the 504 when you are purchasing commercial real estate or heavy equipment and want long-term fixed-rate financing with a low down payment. Choose the 7(a) when you need working capital, inventory financing, business acquisition funding, or flexibility in how the funds are used.

How to Apply for an SBA 504 Loan

1. Find a CDC. The SBA maintains a directory of Certified Development Companies by state.
2. Initial consultation. The CDC will evaluate whether your project fits the 504 program and estimate loan amounts and terms.
3. Gather documentation. Prepare business tax returns (3 years), personal tax returns, financial statements, a business plan or project description and property details.
4. Conventional lender approval. The bank providing the 50% first mortgage must approve its portion independently.
5. CDC and SBA approval. The CDC underwrites and submits the package to the SBA for final approval.
6. Debenture sale. Once approved, your loan is pooled into the next debenture sale. The rate locks at this point.
7. Closing and funding. After the debenture sells, funds are disbursed and the project can proceed.

The entire process from application to funding typically takes 60 to 90 days, though complex projects or incomplete documentation can extend the timeline.

Tips for Getting the Best SBA 504 Rate

• Time the debenture sale. Rates are set at debenture sale dates. If rates are trending down, waiting for the next sale could save money.
• Negotiate the bank portion. The SBA debenture rate is fixed by the market, but the bank's rate on the first mortgage is negotiable. Shop multiple banks.
• Compare CDC fees. Processing fees and servicing fees vary by CDC. A 0.25% difference in the servicing fee compounds over 20 years.
• Strengthen your application. Strong financials, clean tax returns and a clear project description can speed approval.
• Consider the 25-year term. The slightly higher rate may be offset by lower monthly payments, improving cash flow.