The SBA 504 Loan has three components:
1) direct commercial loan from the private sector covering 50 percent of the project, and secured by a senior lien.
2) a loan secured with a junior lien from a CDC (like us at BFC) covering up to 40 percent of the cost, and backed by a 100 percent SBA-guaranteed debenture.
3) a contribution of at least 10 percent equity from your business.
That said, this type of SBA loan has some specific requirements that businesses have to meet in order to qualify: