SBA 504 Loan Rates in 2026

If you have shopped 504 rates and gotten confused, it is usually because you were quoted one number when the loan actually has two. The 504 program splits a project into a bank loan and an SBA-backed debenture, and each half is priced on its own. Understanding that split is the whole game — once you see it, the rate you are quoted makes sense and you can tell a good offer from an average one. For the full picture of the program itself, see what an SBA 504 loan is.

How 504 Rates Are Priced

A standard 504 project is funded in three pieces: a bank or credit union puts up roughly 50% as a first mortgage, a Certified Development Company (CDC) lends about 40% through an SBA-guaranteed debenture, and you bring the final 10% as a down payment.

• The bank first mortgage is priced like any commercial real estate loan — a market rate the lender sets, fixed or variable, often with a 5- to 10-year reset even if it amortizes over 20 to 25 years.
• The CDC/SBA debenture is the piece people mean when they say "the 504 rate." These loans are pooled nationally and sold to investors as bonds once a month. The rate on your debenture is set at that sale, pegged to the 10-year Treasury yield plus a spread that covers the SBA guarantee and ongoing servicing.

So your blended cost of capital sits between the bank rate and the debenture rate, weighted roughly 50/40. That is why two borrowers with identical credit can quote different "504 rates" — their bank halves were priced differently.

Current SBA 504 Rates in 2026

Because the debenture reprices monthly against the 10-year Treasury, there is no single fixed figure that holds all year. Through 2026, effective fixed rates on the debenture portion have generally landed in the mid-6% to low-7% range for 20- and 25-year terms, with the 10-year debenture a touch lower. The table below shows how the pieces typically stack up; treat it as a framework, not a live quote.

The headline takeaway: the fixed debenture leg is the reason people choose a 504. Locking roughly 40% of a large real estate purchase at a fixed rate for 25 years is something a conventional loan rarely offers.

What Moves Your Rate

A handful of factors decide where inside those ranges you land:

• The 10-year Treasury on debenture-sale day. This is the single biggest driver of the fixed leg. It moves with the broader bond market, not with your business.
• Your bank and how it prices the first mortgage. A stronger banking relationship, more down payment, or a lower-risk property all pull the bank half down.
• Property type. General-purpose buildings (offices, warehouses, retail) price better than special-purpose properties like hotels, gas stations, or car washes, which lenders see as harder to resell.
• Term. 25-year debentures exist for real estate; 10-year debentures cover equipment. Longer terms usually carry a slightly higher fixed rate but a much lower payment.

504 Rates vs 7(a) Rates

The most common question we hear is whether a 504 or a 7(a) is cheaper. For long-term, owner-occupied real estate, the 504 usually wins on rate because its main leg is fixed, while a 7(a) is typically variable at prime plus a lender spread and moves every time the Fed does. The 7(a) trades that rate premium for flexibility — it can fund working capital, inventory, and business acquisition, not just real estate and heavy equipment. If your project is a building or major equipment and you want payment certainty, the 504 rate is hard to beat. Walk through the full trade-off in our SBA 7(a) vs 504 comparison.

Fees Beyond the Rate

The rate is not the whole cost. A 504 carries its own fee stack, most of which is rolled into the loan rather than paid out of pocket:

• CDC processing fee — roughly 1.5% of the debenture, financed into the loan.
• SBA guarantee and servicing fees — small ongoing fees baked into the effective rate you are quoted.
• Bank fees on the first-mortgage half, which vary by lender.
• Third-party costs — appraisal, environmental report, and title, same as any commercial real estate deal.

When you compare a 504 to a conventional loan, put every fee into an effective-rate or total-cost number. A slightly higher headline rate with fewer fees can beat a lower rate loaded with points. Our SBA loan calculator and business loan calculator both help you turn a quote into a true all-in cost.

How to Lock Your Rate

This trips up first-time 504 borrowers: you do not lock the debenture rate at approval. The rate is set when your debenture is sold, which happens in a monthly pool after your loan closes and funds. Between approval and funding, the 10-year Treasury can move, so your final rate can differ slightly from the estimate you were quoted. The bank first mortgage, by contrast, can often be rate-locked earlier. Ask both your bank and your CDC exactly when each leg's rate is set so there are no surprises at the closing table.

How to Get a Better 504 Rate

You cannot move the 10-year Treasury, but you can influence the parts of a 504 that are in your control. The bank first mortgage — roughly half the deal — is priced by your bank, so a stronger banking relationship, more down payment, and a lower-risk, general-purpose property all pull that half down. On the debenture side, timing matters: because the rate is set when your debenture is pooled and sold, a project ready to fund in a lower-rate month captures that month's pricing. You cannot perfectly time it, but you can avoid dragging closing into an unknown rate environment. Finally, a clean, well-documented file — solid financials, a clear use of proceeds, and a property that appraises comfortably — keeps the bank half competitive and the whole deal from stalling. The single biggest lever is usually the bank first mortgage, which is exactly why comparing bank-plus-CDC combinations is worth the effort.

Comparing 504 Quotes: What Actually Differs

Two 504 quotes on the same project can differ meaningfully, and it is almost always the bank first mortgage that varies — the CDC/SBA debenture is standardized nationally, but each bank prices its half on its own. So the smart comparison is not "who has the lowest 504 rate" (a slightly misleading question) but "who is pricing the bank half best and moving the deal fastest." A bank that quotes a sharp first-mortgage rate but takes months to close can cost you more — in a moved Treasury and lost time — than one a hair higher that funds on schedule. Rather than approach banks one at a time, tell us about your project once and compare bank-plus-CDC combinations side by side.

Get a Real 504 Quote

Ranges are useful for planning, but only a lender looking at your property, credit, and down payment can quote a real number. Tell us about your project and we will match you with SBA 504 lenders, or call (561) 268-0465 to talk it through.

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