Can I Get More Than One 504 Loan? How Multiple SBA Loans Fuel Success

You’ve taken out a 504 loan and established a home for your small business. Your business is thriving and now you want to open another location. Can you take out another 504 loan? The answer is yes. The SBA 504 loan program makes it possible for you to receive financing from a number of loans over an extended period of time. Here’s how.

How to Get More Than One 504 Loan

As you know, your Certified Development Company (CDC) partners with a conventional lender to provide you with a 504 loan. The SBA/CDC provides 40% of the 504 loan, up to $5 million per project, or $5.5 for manufacturing or energy efficient projects.

For example, let’s say you want to purchase a building for $2 million dollars. In this case, your conventional lender would grant you a loan of $1 million at their own rate and terms. The SBA would provide $800,000, fully amortized and at a fixed, below-market rate, and you would contribute a down payment of 10% ($200,000). The 504 loan structure would look like this:

Conventional 1st Loan: $1,000,000
SBA/CDC 2nd Loan: $800,000
Owner Down Payment: $200,000
Total Project Cost: $2,000,000


At some point, you are ready to expand your business and in need of additional financing. 
Each SBA borrower can qualify for additional financing opportunities! This opportunity is unlocked when borrowers “go green” by reducing their energy consumption or generating renewable energy or energy fuels.


SBA 504 Green Energy Program

With this incentive, additional 504 projects are allowed and there is no limit to the amount of total financing (projects in excess of $25 million qualify). The SBA/CDC portion’s maximum is $5.5 million per project, and the cost of renewable energy equipment can be added to the loan amount to save working capital.


For those unable to meet the energy upgrades requirements, you are still eligible to obtain multiple loans, as loan as your SBA outstanding balance doesn’t exceed $5 million, or $5.5 million for manufacturing projects.

Using the scenario above, the borrower can still receive up to $4.2 million in loans from the SBA!

Where did that figure come from? It’s how far you have to go to reach your $5 million aggregate limit, after taking out the initial $800,000 loan. So if want to purchase another building for  $10 million, it’s doable:

Conventional 1st Loan: $5,000,000
SBA/CDC 2nd Loan:  $4,000,000
Owner Down Payment: $1,000,000
Total Project Cost: $10,000,000


Remember, you can take out loans of 
any amount from your traditional lender, but the SBA provides no more than 40% of the total, up to $5 million. If you incorporate energy-efficiency measures into your plans, you will be eligible for a number of 504 loans of $5.5 million each (up to $16.5 aggregate amount from the SBA).

Multiple 504 Loans Lead to Success

TMC Financing client ACT Environmental Services is an example of what can be accomplished with multiple 504 loans. Business owner, Walt Singer, received his first 504 loan in 2005 and used it to buy the company headquarters in Sunnyvale, CA. At that time, the company was dedicated to transporting hazardous waste.

Since then, the company has continued to flourish. They have taken out nine more 504 loans, and the company is now an industry leader. They have expanded their services to include a full range of waste management, recycling, disposal, treatment, health, safety and compliance needs. They have grown to 250 employees and 110 trucks, and now have 12 locations servicing the western and southwestern regions of the U.S. and Mexico.

Singer attributes a major part of his success to his SBA loans. “Our business requires a large investment in infrastructure that just wouldn’t be feasible if we were leasing,” Singer said. “We’re in a high-growth business with a great demand for cash. If we had to come up with a much higher down payment, we’d have that much less to put into our business. Without the SBA 504 loan program, we’d be 30% less successful.”

Among the numerous awards they have received, ACT was named one of the 50 best workplaces in the country by Inc. Magazine in 2017, and placed 19th in Fortune’s best workplaces for women in 2015. TMC is proud of the role they played in their success!

Access to continuous financing can play a key role in the success of your business. The ability to take out multiple 504 loans can amplify business growth and allows you to receive the program’s advantageous terms on several projects.  A CDC like TMC Financing can give you valuable guidance and help fund your projects. Contact a 504 expert at TMC for complete information.

Barbara Morrison

Barbara Morrison

Barbara Morrison, a local small business advocate and civic leader, founded her first company TMC Financing in 1981. TMC is a Certified Development Company that provides commercial real estate financing to small business owners via the SBA 504 Loan Program. TMC consistently ranks among the top certified development companies nationwide, and has funded projects worth more than $9 billion across California and Nevada. Nearly 5,000 small businesses have benefitted from this financing, resulting in the creation of an estimated 50,000 jobs. TMC is also the No.1 SBA 504 hotel lender in the United States. Barbara is also the founder of Working Solutions, a Bay Area microlender whose mission is to provide micro entrepreneurs, particularly low-income individuals, women and minorities, with the access to capital and resources they need to start a successful business.
Barbara Morrison