Two SBA programs carry most project financing: 7(a), the Agency’s primary business loan program, and 504, a fixed-asset structure delivered through Certified Development Companies. Choosing between them is mostly a question of what the money is for and how long it needs to be fixed. This hub compares them and points to the analysis each file needs.
| 7(a) | 504 | |
|---|---|---|
| Maximum loan | $5 million | $5.5 million (the CDC debenture portion) |
| Delivered by | A participating lender, with an SBA guarantee | A Certified Development Company alongside a senior lender |
| Typical uses | Real estate, working capital, debt refinance, equipment, furniture and fixtures, change of ownership | Major fixed assets: land, buildings, construction, long-life machinery and equipment |
| Working capital | Eligible | Not eligible |
| Rate | Fixed or variable, negotiated with the lender within SBA caps | Fixed on the debenture portion, set when the debenture sells |
| Equity | A lender credit decision | 10, 15 or 20 percent by regulation (13 CFR 120.910) |
Read the detail: SBA 7(a) loans and SBA 504 loans. The requirements common to both are collected on SBA loan requirements.
Both require an operating, for-profit business located in the United States that is small under SBA size requirements, is not an ineligible type of business, and is creditworthy. Both allow SBA or the lender to require an appraisal, a survey or a feasibility study as a condition of the loan. And in both, the borrower applies to the lender or CDC — not to SBA.
The practical consequence is that the quality of the credit file decides the outcome. Where the project has no operating history, the file has to substitute evidence for history: independent demand analysis, a defensible revenue build, a cost estimate that reconciles to the drawings, and coverage tested against downside cases rather than the base case alone.
Independent testing of demand, supply, pricing, cost and coverage for a project that does not yet operate. Required by condition, not by default — see SOP 50 10 8 requirements.
A narrower, faster read on the market itself, useful before an application exists. From $1,950 for one county and one property type, delivered in 3–5 business days — see packages.
An opinion of value, prepared as a separate assignment from any study. Special-purpose properties usually need going-concern treatment — going-concern appraisal.
DSCR modelled on the real amortisation schedule with sensitivity around rate, occupancy and cost — how coverage is tested.
SBA is not the only route. USDA guarantees loans in rural areas under OneRD, including the Business & Industry program, and funds grants that can sit alongside debt. Export-oriented manufacturers may qualify for EXIM support. Projects in qualifying census tracts sometimes reach better economics through New Markets Tax Credits.
Last reviewed September 2026 · verify current program terms with SBA before relying on them.
Fixed fee quoted in one business day. Independent analysis only — Wert-Berater does not arrange, broker or place capital.
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Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.
All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.