SBA 504 Loan with Axos Financial

The SBA 504 loan offered through Axos Financial is a long-term, fixed-asset financing solution designed to help eligible small businesses acquire major fixed assets for expansion and modernization. This program combines private and public capital to provide low down payment options, competitive interest rates, and extended repayment terms. It is particularly well-suited for purchases of commercial real estate, major equipment, and other long-lived assets that support business growth while preserving working capital.

Key Features

• Purpose-built for fixed assets: Financing can be used to acquire commercial real estate, construct or renovate facilities, or purchase heavy equipment with a long useful life.
• Low down payment: Typical structure allows small businesses to put down a smaller equity contribution compared to conventional loans, helping preserve cash for operations.
• Fixed interest rates: Long-term, fixed interest rates on the CDC portion (SBA-backed portion) provide predictable monthly payments and protection from rate volatility.
• Extended loan terms: Repayment terms commonly extend up to 10, 20, or 25 years, depending on the asset financed, which helps reduce monthly payment burden.
• Balanced financing structure: The typical 504 transaction includes three parts: a senior lender (usually a bank) providing 50% of the project cost, a Certified Development Company (CDC) backed by the SBA providing up to 40%, and the borrower contributing the remaining 10% equity.

Benefits for Small Businesses

Axos Financial’s SBA 504 offering is structured to support sustainable growth by addressing common financing barriers faced by small businesses. Borrowers benefit from affordable long-term capital, predictable debt service, and the ability to invest in assets that enhance operational capacity and competitiveness. The low equity requirement preserves working capital, enabling businesses to maintain liquidity for hiring, inventory, and other operational needs. Additionally, the fixed-rate nature of the SBA 504 portion reduces exposure to market interest rate fluctuations over the life of the loan.

Eligible Uses

• Purchase of owner-occupied commercial real estate
• Construction of new facilities or significant renovations to existing properties
• Purchase of long-term machinery and equipment with useful life aligned to loan term
• Land acquisition, site preparation, and associated soft costs such as architecture and engineering tied to the project

Typical Loan Structure

While specific structures may vary, a common SBA 504 financing scenario facilitated by Axos Financial looks like this:

• Senior Lender (bank or credit union): approximately 50% of total project costs
• CDC/SBA-backed loan: up to 40% of total project costs with a long-term, fixed rate
• Borrower equity: usually 10% of total project costs (higher in some situations such as start-ups or special-use properties)

Eligibility Criteria

Eligibility for an SBA 504 loan generally focuses on the size and nature of the business, as well as the intended use of funds. Typical requirements include:

• Operating as a for-profit small business that meets SBA size standards
• Use of proceeds limited to eligible fixed-asset projects
• Demonstrated ability to repay the loan based on business cash flow and collateral
• Good character and management capability
• Owner-occupancy requirements for real estate projects (a minimum percentage of the property must be occupied by the borrower)

Application and Approval Process

The SBA 504 process involves coordination among the borrower, a participating lender, and a Certified Development Company (CDC). Key steps include:

1. Initial consultation to evaluate project scope, eligibility, and debt structure.
2. Submission of financial statements, business plan, and project cost estimates.
3. Underwriting by the participating lender and the CDC, including credit analysis and collateral evaluation.
4. Approval and closing, followed by disbursement according to project milestones.

Timelines can vary depending on the complexity of the project and completeness of documentation, but the program is intended to provide a structured path to long-term financing with a predictable outcome.

Why Choose an SBA 504 with Axos Financial

Choosing Axos Financial for SBA 504 financing offers access to a lender experienced in small business and commercial financing, with the capacity to coordinate with CDC partners and manage multifaceted projects. Axos Financial emphasizes personalized underwriting, transparent fee structures, and a commitment to helping small businesses leverage fixed-asset investments to improve operations and growth prospects. The combination of competitive terms and a focus on borrower needs makes the SBA 504 program an attractive option for businesses seeking to invest in long-term assets without overextending short-term resources.

Considerations and Best Practices

• Prepare thorough financial documentation to accelerate underwriting and demonstrate repayment capacity.
• Plan for contingencies in construction and renovation projects to avoid cost overruns that can impact financing.
• Evaluate the long-term business plan to ensure the asset’s useful life aligns with loan terms.
• Discuss occupancy and usage requirements early for real estate projects to ensure compliance.

Conclusion

The SBA 504 loan facilitated through Axos Financial is a strategic financing tool for small businesses focused on acquiring or improving long-term, fixed assets. By blending reduced down payments, fixed-rate financing, and extended terms, it helps businesses expand capacity, stabilize cash flow, and pursue growth with a manageable debt structure. For businesses seeking to purchase property, construct facilities, or invest in major equipment, the SBA 504 program can provide the stability and capital needed to advance long-term objectives.

Address Bank: Las Vegas, Nevada
Bank: Axos Financial
Headquarters: Las Vegas
Products: Loans & Credit
Type: SBA 504 Loan