SBA 504 Loans for DFW Owner-Users
The only commercial loan product in the country that gives owner-occupiers a 20- or 25-year fixed rate on 40% of their purchase.
- Owner-occupied purchases above $1.5M
- DFW manufacturers, distributors, and service businesses
- Ground-up construction of owner-used facilities
- Borrowers who want long-term interest rate certainty
SBA 504 Loans, at a glance
- Loan size
- $500K – $15M
- Amortization
- 20 or 25 years fully amortizing
- Term
- 20 or 25 years
- LTV
- Up to 90% (50/40/10 structure)
- Rate
- CDC: fixed at debenture rate. Bank: market
- Typical close
- 60–90 days
SBA 504 is structurally different from every other commercial loan product because it splits the deal across three parties. A conventional first-lien lender provides 50% of the project cost, a Certified Development Company (CDC) delivers a second-lien SBA-backed debenture for 40%, and the borrower contributes the remaining 10%. The result is 90% leverage on owner-occupied real estate with a fixed rate on 40% of the loan for 20 or 25 years, a feature no other commercial product in the market offers.
For DFW business owners buying a building north of $1.5M, 504 is almost always the right answer over 7(a). The long-term fixed rate on the CDC piece removes interest rate risk on the largest slice of the debt stack, and the overall blended rate typically comes in below a conventional commercial mortgage. We regularly structure 504 deals for manufacturers in the Alliance corridor, medical offices in Plano, and distribution facilities across South Dallas.
The 50/40/10 structure in practice
On a $3M owner-occupied building, a typical 504 structure looks like this: $1.5M first mortgage from a conventional bank (50%), $1.2M CDC debenture (40%), and $300K borrower equity (10%). The bank piece is usually a 25-year amortization with a rate reset every 5 or 10 years. The CDC piece is fully amortizing over 20 or 25 years with a fixed rate locked in at funding.
One structural note that trips up first-time borrowers: there are always two closings. The bank portion closes first, followed weeks later by the CDC debenture once the SBA bond sale completes. During that gap the bank typically provides interim financing at the bank rate. We walk every borrower through the timeline so there are no surprises.
What properties qualify for 504 in DFW
Eligible properties include industrial/flex buildings, medical and professional offices, retail where the borrower is the owner-operator, hotels operated by the borrower, restaurants, warehouses, and ground-up construction of any of the above. Pure investment real estate (triple-net leased, tenant-occupied) does not qualify, the borrower's business must occupy at least 51% of the building (or 60% for new construction).
DFW is one of the busier 504 markets in the country thanks to the volume of small and mid-sized business owners buying their first or second building. We see particularly heavy 504 volume in submarkets like Garland, Mesquite, Grand Prairie, and Fort Worth's Alliance corridor, where land is still affordable enough to ground-up build an owner-used facility.
Ready to explore SBA 504 options?
Get a QuoteSBA 504 Loans, FAQ
What is the maximum SBA 504 loan size in Texas?
The CDC portion can go up to $5 million on most projects and up to $5.5 million for manufacturers and certain energy-efficient projects. Because that is only 40% of the deal, total project sizes of $12M–$15M are achievable. The first-lien bank piece has no SBA-imposed cap.
Is the SBA 504 rate really fixed for the whole term?
Yes, on the CDC portion, which is 40% of the deal. The rate is set at the time the SBA sells the bonds that fund the debenture, typically 60–90 days after the bank portion closes. The first-lien bank piece has its own rate, usually with a 5- or 10-year reset.
Can I use SBA 504 for construction?
Yes. 504 ground-up construction is a common DFW use case, particularly for flex and industrial buildings. The borrower must occupy at least 60% of the completed building (vs. 51% for existing buildings). The construction period is typically financed by the bank as interim, then re-amortized once the CDC debenture funds at completion.
Are there prepayment penalties on SBA 504?
The CDC/debenture portion carries a declining prepayment penalty over the first 10 years (half the term). The bank first-lien typically has its own prepayment structure, which varies by lender. We negotiate the bank-side prepay on every deal.
How does 504 compare to a conventional commercial mortgage?
Conventional mortgages typically cap at 75% LTV, require 25% down, and reset rates every 5 years. 504 gets you to 90% leverage with a long-term fixed rate on the biggest slice. On paper the monthly payment is usually lower with 504, and the cash preservation matters, the 15% equity you keep funds growth.
Other loan programs
SBA
SBA Loans
Government-guaranteed financing for owner-users buying, building, or expanding commercial property across North Texas.
- Loan size
- $150K → $15M
- Close
- 45–75 days
SBA 7(a)
SBA 7(a) Loans
The most flexible small-business loan in the country, real estate, acquisition, equipment, and working capital in a single package.
- Loan size
- $50K → $5M
- Close
- 45–60 days with Preferred Lender
Bridge
Bridge Loans
Short-term debt capital for acquisitions that need speed, value-add projects that cannot wait for a permanent loan, and refinances with a story.
- Loan size
- $500K → $150M
- Close
- 2–4 weeks
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