SBA 504 Loan Rates: Dated Pricing and Total Project Cost

Rate snapshot checked September 7, 2026: Statewide CDC publishes a 6.27% August 2026 effective rate for its 20-year purchase/construction category. Its September row is still blank. This is a dated reference, not a PGC quote or the rate on your whole project. View the source and current updates. Manufacturer fee treatment and project type may change the applicable rate.

SBA 504 loan rates work differently from every other SBA program — and that difference is exactly why manufacturers use the 504 for real estate and equipment. Instead of floating over the prime rate like a 7(a), the SBA portion of a 504 loan carries a fixed rate set by the bond market. Here's how the rate is actually determined, what's included in it, and how to think about timing.

The 504 Structure: Three Pieces, Two Rates

• 50% — a first-lien loan from a bank, at a rate you negotiate with that bank (fixed or variable)
• 40% — a second-lien SBA debenture issued through a Certified Development Company (CDC), at a fixed rate set at funding
• 10% — your down payment (15% for startups or special-purpose properties)

When people talk about 'the SBA 504 rate,' they mean the debenture piece. That 40% is funded by bonds sold to investors each month, so its rate is locked for the full 10, 20, or 25-year term the day the debenture prices — it never floats.

How the Debenture Rate Is Calculated

The effective 504 rate has three components: the base debenture rate, which prices at a spread over the U.S. Treasury yield of matching maturity (the 10-year Treasury for 20- and 25-year debentures); ongoing program fees, including the CDC servicing fee and SBA guarantee fee, which are amortized into the monthly payment; and the note rate math that converts semi-annual bond pricing into your monthly effective rate. The practical takeaway: when Treasury yields fall, next month's 504 debentures get cheaper — the rate follows the bond market, not the Fed's prime rate directly.

Compare the Full Project Cost

• Below-market fixed rate: debentures price near Treasury yields because investors treat them as government-backed paper
• 20-25 year fixed terms: conventional commercial mortgages typically reprice or balloon in 5-10 years; the 504 debenture never does
• 90% financing: putting 10% down instead of 25-30% keeps working capital in the business — where programs like MARC can then leverage it further
• Blended cost: even if the bank's first-lien rate matches a conventional mortgage, the fixed SBA debenture on 40% of the project pulls the blended rate down

Timing and Locking Your Rate

Pricing and funding follow the applicable debenture schedule. Ask the CDC when the rate is established for your loan and how interim financing works. A current published rate is not locked merely because you applied.

504 vs. 7(a) for a Manufacturing Facility

A 7(a) loan can also buy real estate, and it's simpler — one loan, one lender. But 7(a) rates float over prime, and 25-year fixed pricing is rare. For a long-hold facility, the 504's fixed debenture usually wins on total cost; see our full SBA 7(a) vs 504 comparison for manufacturers. And if the facility purchase is part of a bigger growth plan, the 504 pairs cleanly with a MARC working capital facility.

Sources and current program guidance

Checked September 7, 2026. Consult SBA origination policies, the MARC appendix and the manufacturer fee guide. Program eligibility and lender conditions determine the final offer.

Illustrative blended interest calculation

For illustration only, suppose $1 million of bank debt costs 7.5% and $800,000 of CDC debt costs 6.27%. The balance-weighted rate is about 6.95% across the $1.8 million financed balance: (1,000,000 × 7.5% + 800,000 × 6.27%) ÷ 1,800,000. This is not APR or a payment quote; it ignores timing, amortization differences, upfront charges and rate changes. Obtain separate payment schedules and full cost disclosures.