SBA 504 Loan Program Updates

Learn about recent SBA 504 Loan updates, what 504 loans may be used for, benefits of SBA 504 financing, eligibility requirements, and more when Lisa Carbajal, VP for Cen Cal Business Finance Group joins SBDC director Kelly Bearden on this week’s free webinar.

This marks the 367th episode of the “Webinar Wednesday” business series that provides news and information helpful to employers and business owners.

The CSU Bakersfield SBDC provides free one-on-one help. New and existing businesses can go to https://csubsbdc.com/ to sign up to meet with a business advisor at no cost.

TIMESTAMPS
00:00 Intro
00:22 What’s up today December 10, 2025
02:32 Economic Corner
5:29 Federal funds rate has moved through historical cycles, with a recent drop to 3.75% and a possible range of 3.75 to 4.0%.
6:02 Discussion highlights how floor rates appeared when rates were generally low for extended periods, influencing loan pricing and guarantees.
7:05 Overall trend shows interest rates rising through 2007-2009 and then remaining near zero for several years, followed by a rebound and recent decline to 3.75%, impacting capital markets and loan costs.
U.S. Federal Launch Target Rate
https://www.cnbc.com/2025/06/18/fed-h...

9:11 Calculating Interest Rates
Calculator.net – loan calculator
https://www.calculator.net/loan-calcu...

9:40 Kelly demonstrates a 20-year loan that shows payment differences when interest rates are halved, with total payments dropping from about $2.6 million to $1.7 million for a $1 million loan.
10:00 At 6% interest, total payments are about $1.7 million, down from $2.6 million at a higher rate and the total payback on a million-dollar loan at current rate is about $719,000 in interest. Interest rate risk on higher amounts is a very big and very real thing.

14:38 Subscribe to our CSUB SBDC YouTube Channel
   / @csubsbdc  

18:01 Kelly introduces Lisa Carbajal, VP at Cen Cal Business Finance Group https://cencalfinance.com/

19:03 Lisa begins - Understanding the SBA 504 Loan Program
19:49 The program offers up to 90% financing and is designed to promote economic development and job creation in communities.
20:07 A certified development company licenses to offer SBA 504 loans and the bonds issued to fund the SBA504 portion are fully guaranteed by the SBA.
21:34 Eligible uses include purchasing or renovating commercial property, with occupancy requirements and potential for energy-efficient upgrades and energy solar additions.
22:49 The program can finance energy-efficient upgrades, existing buildings rehabilitation, energy projects, or new construction with specific occupancy requirements.
How SBA 504 Financing Is Structured
25:58 90% of project costs can be funded, split into a 50% loan with a banking partner and a 40% SBA-backed loan, with the SBA loan fixed and amortized up to 25 years.
26:56 The two loans imply two separate payments, with the 50% bank loan following traditional commercial terms and the 40% SBA loan providing a fixed-rate, 25-year amortization option.
27:07 Recent funding rates for November are highlighted at 5.862%, described as a phenomenal rate.
Loan Limits
28:13 Maximum loan amounts and eligibility are discussed, with up to 90% of project costs covered, a 5.5 million limit for the SBA portion (manufacturing qualifies for this cap), and special provisions for energy public policy projects and ground-up construction with solar.
Benefits of Choosing SBA 504 Over Other Loans
30:57 SBA 504 financing offers a lower down payment, potentially as low as 10% of project costs, and features a long-term repayment with a 25-year amortization and no personal home liens.
31:56 Process of Applying for SBA 504 Financing
SBA application package, financial statements, three years of personal and business tax returns, personal financial statement, recent K1s, and project cost documents are collected; SBDC assistance may be involved for financial statements or entity documents, and previous government loans are reviewed to ensure no defaults.
33:30 Property Vesting
35:09 Loan Process Overview
35:46 More Key Points About 504 Financing
37:20 Recent SBA Updates
38:15 Eligibility Updates
39:55 Recent SBA 504 Funded Project Examples
$3.5 million real estate purchase creating 14 new jobs and retaining 45.
$1.83 million heavy industrial purchase retaining 13 jobs.
Refinance of a residential care facility that added cash flow and retained 24 jobs.
$615,000 commercial real estate purchase for a light industrial building creating one new job and retaining two.
43:29 Kelly rejoins Lisa for discussion and Questions and Answers with Attendees

#sbaloans #sbaloan #sba504