SBA 504 Loans: WBDC and Webster Five Explain Small Business Financing

How SBA 504 Financing Works

By-Hank Stolz
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How SBA 504 Financing Works

The program structures loans with 50% from the bank, 40% from the SBA, and 10% from the borrower, featuring 25-year fixed rates below market value.

This financing tool supports diverse projects across central Massachusetts—from startup companies and family businesses to hotels and manufacturing facilities—helping owners preserve working capital while investing in real estate, equipment, and expansion.

Lower Down Payments and Long-Term Financing

Escobar notes the differences and value for business owners, “It’s typically 20 to 30% down payment. So, the SBA 504 offers a 10% down payment. They offer a 25-year fixed, lock that in, which they wouldn’t normally get. And the SBA rates are always below market, below the bank. It’s just a fantastic program for businesses all around.”

Starting a Conversation With a Banker

Pena encourages people to call her, “I absolutely recommend having a relationship with a banker. Twenty-five plus, percent of my job is being an advisor and a mentor. So don’t be concerned to say, “I don’t think I’m ready. I don’t know what’s next.” Come and talk to us. We’ll let you know and we’ll advise you, always come with some tax returns if you are an established business. If not, let’s have a conversation so we could direct you to the proper people that could help you. You’d be really surprised how many resources are out there with very little cost. If any, that’s out there.”

Local Support for Central Massachusetts Businesses

The WBDC emphasizes its local, hands-on approach, providing end-to-end assistance including property searches, broker connections, and celebratory ribbon cuttings with city officials.

With special incentives currently available for manufacturers and a streamlined application process, the program serves established businesses and entrepreneurs alike who may qualify regardless of whether they initially believe they meet requirements.