Can I use a 504 loan for working capital?

Generally no. 504 loans are for fixed assets. Use a 7(a) loan for working capital.

SBA 7(a) vs 504 Loans: Differences, Uses and Terms

SBA 7(a) vs 504: Which SBA Loan Is Right for You?

SBA 7(a) loans are flexible, general-purpose loans for working capital, equipment, refinancing and acquisitions. SBA 504 loans are specifically for major fixed assets like real estate and heavy equipment, and typically require about 10% down with long fixed-rate terms. Choose 504 for property; choose 7(a) for nearly everything else.

Last updated October 23, 2026

SBA 7(a)

The most common SBA loan, made by banks and approved lenders with an SBA guarantee. Terms up to 10 years for most uses and 25 years for real estate.

SBA 504

Typically structured as 50% bank loan, 40% CDC debenture and 10% borrower equity, with long fixed-rate terms for the CDC portion.

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