SBA 504 Loan at Fifth Third Bank

The SBA 504 loan program offered through Fifth Third Bank is designed to help growing small businesses acquire the long-term, fixed-rate financing necessary for major fixed assets. This program pairs a conventional bank loan with a low-cost, SBA-backed debenture administered by a Certified Development Company (CDC), allowing business owners to benefit from reduced down payments, predictable monthly debt service, and extended repayment terms that preserve working capital for operations and growth.

Who this loan is for

The SBA 504 product is intended for eligible for-profit small businesses that need financing for commercial real estate, owner-occupied facilities, or heavy equipment. It is particularly well suited for companies planning to:

• Purchase land and buildings for owner-occupancy
• Construct or renovate commercial facilities
• Acquire long-lived equipment integral to operations
• Refinance certain outstanding debt when it strengthens the business and meets SBA policy

Key benefits

• Low down payment: SBA 504 financing typically requires a smaller borrower contribution than conventional commercial mortgages, helping preserve cash for working capital.
• Long-term, fixed-rate financing: The SBA-backed portion is issued as a debenture with fixed rates and extended maturities (commonly 10, 20, or 25 years), reducing interest-rate exposure.
• Lower overall monthly payments: The combination of a senior bank loan and SBA CDC debenture can deliver more manageable monthly payments compared with short-term or unsecured alternatives.
• Preserves bank lines: Structuring enables the borrower to maintain operating lines of credit and other liquidity sources for day-to-day needs.
• Supports growth and job creation: The program is oriented toward projects that create or retain jobs or meet public policy goals in the community.

How the financing is typically structured

SBA 504 financing is a two-part structure: a first lien loan from a participating lender (such as Fifth Third Bank) and a second lien SBA-backed debenture arranged by a CDC. The bank’s first mortgage provides a portion of the project financing, while the SBA-backed CDC funds a long-term, fixed-rate component. This blended approach combines the relationship and underwriting of a commercial lender with the cost and stability advantages of the SBA-backed portion.

Eligible uses of funds

Funds may be used for acquisition, construction, expansion, renovation, and certain equipment purchases. Typical eligible uses include:

• Purchase of owner-occupied commercial real estate
• New construction and substantial renovation
• Acquisition of machinery and heavy equipment with a useful life that matches the loan term
• Minor tenant improvements integral to owner-occupied facilities
• Refinancing of qualifying debt when it supports growth or improved cash flow

Eligibility and underwriting considerations

To qualify, businesses must meet SBA size standards and operate for profit. Underwriting considers the strength of the business plan, historical and projected cash flow, collateral, credit history, and management experience. The project must demonstrate a viable repayment source and typically support job creation or community economic development objectives. Fifth Third Bank evaluates each transaction in partnership with a local CDC to ensure SBA policy alignment.

Typical documentation

Applicants should be prepared to provide a comprehensive package to expedite review. Common documentation includes:

• Business and personal tax returns for several years
• Financial statements: balance sheet, profit & loss, and cash flow statements
• Interim financials and accounts receivable aging, if applicable
• Business plan and project narrative describing the use of proceeds
• Purchase agreements, construction budgets, and contractor contracts
• Organizational documents, leases, and material contracts
• Personal financial statements and credit authorizations for principals

Application process and timeline

The process typically begins with a pre-qualification conversation to outline project feasibility and eligibility. After initial documentation is submitted, Fifth Third Bank works with a CDC to underwrite and package the SBA-backed portion. Timelines vary by project complexity, but borrowers can generally expect underwriting, SBA approval, and closing to occur within several weeks to a few months when all required information is provided promptly.

Why choose Fifth Third Bank for SBA 504 financing

Fifth Third Bank combines local decision-making, commercial lending expertise, and experience coordinating SBA programs with Certified Development Companies. The bank’s involvement can streamline the senior loan underwriting, while the SBA-backed portion offers competitive fixed-rate financing for long-term assets. For businesses focused on expansion, capital preservation, and predictable debt service, this blended SBA 504 solution can be an effective path to growth.

Important considerations

• Not all projects are eligible; SBA policy governs use of proceeds and borrower qualifications.
• Approval is subject to underwriting, SBA review, and CDC participation.
• Terms, rates, and loan sizes depend on project specifics and prevailing market conditions.
• Personal guarantees and lien positions are common components of SBA 504 transactions.

Conclusion

The SBA 504 loan program available through Fifth Third Bank can be a powerful financing tool for small businesses planning to acquire, construct, or upgrade long-lived assets. By combining a conventional bank loan with an SBA-backed CDC debenture, borrowers benefit from lower down payments, extended amortizations, and fixed-rate stability that support sustainable growth. Prospective applicants should prepare a complete package and engage early with bank and CDC representatives to determine project eligibility, optimize structure, and accelerate the path to closing.

Address Bank: Fifth Third Center, Cincinnati, Ohio, U.S.
Bank: Fifth Third Bank
Headquarters: Cincinnati
Products: Loans & Credit
Type: SBA 504 Loan