SBA 504 Loan at Eastern Bank

Eastern Bank's SBA 504 loan product is designed to help small and growing businesses acquire long‑term, fixed‑rate financing for commercial real estate and major fixed assets. Combining a first mortgage from a local lender with a low‑down, long‑term second mortgage backed by the U.S. Small Business Administration and a Certified Development Company (CDC), this program preserves working capital while enabling owners to invest in facilities, equipment, and expansion that support sustainable growth.

Key features

• Low down payment: Typical borrower equity requirement starts at 10%, allowing businesses to preserve cash for operations.
• Three‑party structure: Financing is arranged as a conventional first mortgage from a lender, an SBA 504 CDC‑sponsored debenture for up to 40% of project costs, and a borrower down payment.
• Long‑term, fixed rates: The SBA 504 portion provides long amortizations (commonly 10, 20, or 25 years) and a fixed interest rate for predictable budgeting.
• Use of proceeds: Purchase or construction of owner‑occupied commercial real estate, purchase of long‑lived machinery and equipment, renovations, and in selective cases, refinance of qualifying debt.
• Preserve working capital: Lower equity requirements help businesses maintain liquidity for growth and operations.

Who this loan is for

The SBA 504 product at Eastern Bank is best suited for creditworthy, for‑profit small businesses seeking to purchase, construct, or improve owner‑occupied commercial real estate or acquire major equipment with a long useful life. Typical borrowers include manufacturing firms, professional service providers, retail operators, healthcare practices, restaurants, and other businesses that need stable, owner‑occupied facilities.

Eligibility overview

• Business must meet SBA small business size standards and be able to demonstrate the ability to repay the loan.
• Owner‑occupancy is generally required (commonly at least a majority occupancy for existing facilities and higher for new construction).
• Projects must create or retain jobs or meet public policy goals in certain cases.
• Startups and special‑purpose properties may face higher down payment requirements.

Typical loan structure and terms

While specifics depend on the project and borrower profile, a typical SBA 504 project is structured with the following elements: a conventional first mortgage (often around 50% of the project), an SBA 504 debenture through a CDC (up to 40%), and the borrower's down payment (starting at around 10%). The SBA portion generally offers fixed interest rates and long amortization periods suitable for commercial real estate; the lender portion terms are determined by the participating bank.

Benefits

• Lower equity requirement: Preserve capital for inventory, hiring, or other investments.
• Predictable payments: Fixed rates on the SBA portion reduce exposure to rate volatility.
• Competitive financing for hard assets: Longer amortizations and favorable terms for real estate and large equipment acquisitions.
• Local decision‑making: Eastern Bank combines small business expertise and local market knowledge to structure financing that fits community businesses.

How to apply

1. Initial consultation with an Eastern Bank small business lender to review project goals and preliminary eligibility.
2. Prequalification and review of financials to determine approximate financing structure and down payment requirements.
3. Formal application submitted to the bank and coordinated with a participating CDC for the SBA 504 debenture.
4. Underwriting, appraisal, environmental review, and SBA approval processes.
5. Closing and funding once approvals are in place and conditions satisfied.

Documentation typically required

• Business and personal tax returns (recent years)
• Current financial statements and interim statements
• Business plan and financial projections
• Ownership information and resumes of principals
• Purchase agreement, construction plans, or equipment invoices
• Environmental reports and property appraisal (as required)

Common questions

Can the SBA 504 loan be used to buy land? Yes. Funds may be used to purchase land and construct or renovate owner‑occupied facilities.

How long does closing take? Timing varies by project complexity, but borrowers should plan for a multi‑week process that includes underwriting, appraisals, and SBA documentation review.

Are there fees? There are SBA and CDC fees associated with 504 financing; many fees may be financed as part of the transaction depending on the project and structure.

Why choose Eastern Bank for SBA 504 financing

Eastern Bank combines local relationship banking with experience in SBA‑backed programs. Borrowers benefit from local underwriting, personalized service, and the ability to structure financing that aligns with business goals. The SBA 504 product is particularly powerful for companies that want to invest in permanent facilities, control long‑term occupancy costs, and access fixed‑rate financing while keeping more cash on hand for growth.

If your business is planning a capital project—purchasing property, constructing a new facility, or acquiring long‑lived equipment—SBA 504 financing through Eastern Bank offers a strategic way to match long‑term assets with long‑term, affordable financing.

Address Bank: Boston, Massachusetts, U.S.
Bank: Eastern Bank
Headquarters: Boston
Products: Loans & Credit
Type: SBA 504 Loan