SBA 504 Loan Calculator
See the 50/40/10 structure and blended rate for owner-occupied real estate or major equipment — payment per piece and the down-payment cash you need.
Written by Dorothy Ibrahim, 10+ years in banking & finance
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How we calculate this
This calculator lays out the SBA 504 structure for owner-occupied real estate or major equipment: a bank first mortgage for 50% of the project, a CDC/SBA debenture for typically 40%, and your down payment for the remaining 10% (15% for startups or special-use property). It amortizes each piece at its own rate and term, then shows the combined payment, the blended rate, and the true blended APR on the whole package.
The formulas
- Bank portion
- 50% × project cost
- CDC/debenture portion
- (100% − 50% − down payment %) × project cost, capped at $5,500,000If the CDC piece would exceed the cap, the excess shifts to the bank portion.
- Down payment
- down payment % × project costMinimum 10%; 15% if the business is under 2 years old or the property is special-use.
- Payment per piece and combined
- each portion amortized at its own rate and term; combined payment = bank payment + CDC payment
- Blended rate (display)
- (bank portion × bank rate + CDC portion × CDC rate) ÷ total financed
- True blended APR
- the internal rate of return on the combined cash flows — total financed at closing versus both payment streams for as long as each runs
- Property DSCR (optional)
- annual net operating income ÷ (combined payment × 12)Flagged when below the lender-standard 1.25× minimum.
Worked example
- Say the project costs $1,000,000 with the standard 10% down: the bank funds $500,000, the CDC funds $400,000, and you bring $100,000 in cash.
- The bank piece at 8.0% over 300 months costs $3,859.08/month; the CDC piece at the ~6.4% debenture rate over 300 months costs $2,675.89/month.
- Combined, that is $6,534.97/month.
- The balance-weighted blended rate is ($500,000 × 8.0% + $400,000 × 6.4%) ÷ $900,000 = 7.29%, and the true blended APR on the combined cash flows works out to about 7.30%.
- Total interest across both pieces over the 25 years is $1,060,490.58.
Rates, benchmarks & sources
- The 50/40/10 split, the 15% requirement for startups and special-use property, and the $5,500,000 CDC/debenture maximum. — SBA 504 program structure (config, status: provisional)
- The ~6.4% default debenture rate is an approximation and moves with monthly debenture pricing — it is editable, and you should enter the current effective rate from your CDC. — CDC debenture pricing — tied to the 10-year Treasury (config, status: provisional; verify at build)
- The 1.25× DSCR minimum used to flag the optional property cash-flow check. — Lender standard (authoritative benchmark, benchmarks.ts)
- The note that a 504 blend typically lands 1–3 points below a conventional commercial mortgage for the same project. — Industry rule of thumb
Figures current as of 2026-07-02. See our methodology & editorial standards for how constants are versioned and verified.
What this tool doesn’t model
- The default CDC debenture rate (~6.4%) is marked provisional in config — it approximates pricing tied to the 10-year Treasury and changes with each monthly debenture sale, so replace it with your CDC's current effective rate.
- 504 loans fund owner-occupied real estate and major equipment only — not working capital, inventory, or investment property; this tool does not check eligibility.
- CDC processing fees, bank closing costs, and the fees embedded in the debenture's effective rate are not itemized separately here — the effective debenture rate you enter should already include them.
- This is an estimate, not an offer: the bank prices its half independently, and both the bank and the CDC underwrite your business, the property, and its cash flow.
- Assumes fixed rates for both pieces over their full terms; some bank first mortgages reprice after an initial fixed period.
Frequently asked questions
Why are there two loans instead of one?
That is the 504 design: a bank lends 50% in first position at its own market rate, and a Certified Development Company (CDC) funds typically 40% through an SBA-guaranteed debenture at a rate tied to the 10-year Treasury. You get one project, two notes, and two payments — which is why this tool shows each piece separately plus the combined payment and blended rate.
When do I need 15% down instead of 10%?
Config records two cases that raise the borrower equity requirement to 15%: businesses under two years old (startups) and special-use properties such as hotels, gas stations, or care facilities. If both apply, lenders often require more still. The calculator lets you pick 10% or 15% and rebuilds the whole structure around it.
What happens when my project is too big for the CDC piece?
The CDC/debenture portion is capped at $5,500,000. On a very large project — say $20,000,000 at 10% down, where 40% would be $8,000,000 — the tool caps the CDC piece at the maximum and shifts the excess to the bank portion, then notes it did so. The bank side has no SBA cap, but pricing on the shifted amount is up to the bank.
Is the blended rate a real rate I could compare to a commercial mortgage?
Yes — that is its purpose. The balance-weighted blend (7.29% in the worked example) and the true blended APR (about 7.30%) let you compare the two-loan package against a single conventional commercial mortgage quote. The rule of thumb is that a 504 blend lands 1–3 points below conventional pricing for the same project, mostly because the debenture piece is cheap.
Does this tell me whether I will be approved?
No. It computes the structure and cost of terms you enter — actual approval depends on SBA eligibility (owner-occupancy, size standards, use of proceeds) and on both the bank's and the CDC's underwriting of your cash flow and the property. The optional DSCR check against the lender-standard 1.25× minimum is a preview of the first question they will ask.
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themoneysheet provides educational estimates, not financial, tax, or legal advice. Figures use published rates and formulas current as of the date shown, but your situation may differ. Consult a qualified professional (CPA, attorney, or licensed advisor) before making financial decisions. Rates shown are estimates; actual offers depend on lender underwriting.