In one sentence
An SBA program financing owner-occupied commercial real estate and equipment through a bank first mortgage plus a subordinate CDC debenture.
The longer version
The 504 structure splits a project into a conventional bank first mortgage (typically 50%), a subordinate SBA-backed debenture through a Certified Development Company (typically 40%), and borrower equity (10%). It funds owner-occupied real estate and heavy equipment for small businesses.
For lenders, the two-loan structure and CDC coordination add closing steps and documents beyond a conventional mortgage, so 504 closings reward a clear checklist across the bank, the CDC, and SBA.
Keep reading