Calculate the unique 50/40/10 funding structure for commercial real estate or heavy equipment projects.
Startups and special purpose properties require a higher down payment.
The SBA 504 Calculator is explicitly designed for entrepreneurs purchasing commercial real estate or heavy machinery. Because 504 loans use a unique multi-lender structure, standard loan calculators cannot accurately estimate your capital stack or down payment requirements.
You enter the total project cost of the real estate or equipment you wish to purchase. The calculator then models the standard 50/40/10 split: determining exactly how much the primary bank will fund (50%), how much the CDC/SBA will fund via a secondary mortgage (40%), and what your required cash down payment will be (10%).
The SBA 504 loan program is the gold standard for purchasing commercial real estate or heavy equipment. It features a unique three-part structure designed to minimize the borrower's down payment:
While 10% is the standard down payment, it increases by 5% if the business is a startup (under 2 years old) OR if the property is considered "special purpose" (e.g., a gas station or hotel). If both conditions apply, a 20% down payment is required.
504 loans have slightly higher upfront fees than standard bank loans because two lenders are involved. The CDC loan includes an SBA Guaranty Fee (0.5%), a CDC Processing Fee (1.5%), and a Funding Fee. Fortunately, these are financed into the CDC portion of the loan.
The SBA 504 loan has a strict, declining prepayment penalty for the first 10 years of the 25-year term. It starts at a high percentage and decreases by 10% each year until it disappears in year 11. You should not take a 504 loan if you plan to flip or sell the property quickly.