Starting or growing a business can, and usually does, involve spending in several different areas.  And some business owners may find their type of business to be one that lenders pass on due to inexperience with the business type or lack of comfort with the risks.

The SBA 504 Loan Program is designed to help business owners be successful.  Funds can be used for purchasing land, purchasing existing buildings, construction and improvements, including grading, utilities, parking lots, landscaping, equipment or furniture/fixtures.  However, what people might not realize, is the 504 can also be used for the often “difficult-to-finance projects” as well.  For example:

Agribusiness Projects:

  • Grain Elevators
  • Irrigation Equipment
  • Warehousing and Processing facilities
  • Operations and fertilizer plants
  • Livestock feed lots
  • Dairy farm start up and expansion
  • Livestock arenas
  • Hog farrow-to-finish facilities


  • Assisted Living Facilities
  • Independent Living
  • Nursing Homes
  • Alzheimer’s Facilities
  • Drug and Alcohol Centers
  • Rehab Facilities

Passive-Income Properties:

SBA 504 loans are technically for “owner-occupied/owner-user” properties.  However, some lenders may be unaware that SBA changed the rules for “passive income” properties, so properties that were formerly prohibited may now be eligible for 504 financing.

  • RV parks
  • Campgrounds
  • Marinas
  • Mini storage facilities

Keep in mind, eligibility is based on IF 50% or more of the business’s revenue for the previous year was from visitors who stay for 30 days or less.

Special-Purpose Properties:

  • Bowling Alleys
  • Medical or Health Facilities
  • Sports Arenas
  • Wineries
  • Railroads
  • Auto repair centers or car washes
  • Funeral Homes

Other, lesser-known uses of the 504 program are:

  • Trucking company depots
  • Green friendly” initiatives:
  • Energy Reduction
  • Renewable Energy

Through the 504 Loan Program, banks can offer long-term financing to small business customers who otherwise might not obtain the necessary financing to grow.

So, what type of borrower is a good candidate for an SBA Loan?  “Well, essentially, the big national chains don’t need us.  However, just about any other for-profit business owner who wants to build, buy, or improve a commercial property will probably be a good fit.”