The Appalachian Development Corporation (ADC) is a Certified Development Corporation that provides the SBA 504 Loan Program throughout South Carolina.   The SBA 504 loan offers long-term, fixed rate, subordinate financing for acquisition and/or renovation of capital assets including land, building and equipment, eligible soft costs such as architect, engineering, and environmental fees, change of ownership of capital assets and certain debt refinancing. SBA 504 funds cannot be used for working capital, broker’s fees, inventory or rolling stock. Projects are financed in partnership with financial institutions (banks, credit unions, private lenders, etc.) who obtain a senior position on the project assets.

Why consider an SBA 504:

  • Reduced equity requirement
  • Fixed rate financing for the SBA portion of the loan
  • Longer terms & fixed rate can improve cash flow & reduce interest rate risk
  • Limits the loan risk of the primary lender
  • Lender can obtain Community Reinvestment Act credit
  • Can finance much larger projects than with an SBA 7a
  • Fees are typically less than an SBA 7a
  • The 504 program has a charge-off rate of 0.6 percent over the past 10 years
SBA 504 Guidelines:

  • Bank typically finances 50% of the cost; bank percentage cannot be less than the SBA portion
  • SBA 504 portion (max 40%) of a loan: $100,000 to $5,000,000; up to $5,500,000 for manufacturing
  • Borrower provides 10% to 20% equity; can be cash, land and/or borrowed
  • Terms: 10 years for equipment and up to 25 years for fixed assets
  • Below market, fixed interest rates
  • Soft costs such as appraisal, contingencies, environmental reports, interim interest, survey, etc. can be financed
  • Collateral is typically the project assets and key person life insurance
  • SBA fees (~3% of the SBA loan) financed in SBA loan
  • Must be a for-profit business
  • Must meet an economic development, public policy goal or job creation/retention (1 full-time job per $90,000 or $140,000 (if manufacturer)) of SBA loan amount within 2 years of loan funding
Loan Size:

  • $5,000,000 SBA Gross Debenture maximum for non-manufacturers
  • $5,500,000 SBA Gross Debenture maximum for manufacturers or meets an eligible energy public policy
  • In some circumstances, the SBA 504 aggregate amount may be up to $16,500,000
  • Can combine an SBA 7(a) and 504 loan


Standard Financing New Business OR Limiter or Special Purpose Property Both NEW and Limited or Special Purpose Property
Lender 50% 50% 50%
SBA (ADC) 40% 35% 30%
Borrower 10% 15% 20%

Application Forms