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SBA 504 Loan Guide
Last updated on Feb 19, 2023
2 min read

Can You Take Out Multiple SBA 504 Loans?

Can you take out multiple SBA 504 loans ? Yes, you can. In fact, you can take out multiple SBA loans over time in order to build a successful business. However, it is not as simple as just making a second application. If you took out your first 504 loan and eventually worked through all the ava

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In this article:
  1. Can a Borrower Have More Than One SBA 504 Loan?
  2. Borrower Eligibility for Multiple SBA Loans
  3. How to Take Out More Than One SBA 504 Loan
  4. Related Questions
  5. Get Financing

Can a Borrower Have More Than One SBA 504 Loan?

Can you take out multiple SBA 504 loans? Yes, you can. In fact, you can take out multiple SBA loans over time in order to build a successful business. However, it is not as simple as just making a second application. If you took out your first 504 loan and eventually worked through all the available funds growing your company, you might be ready for additional SBA funding. Here’s how to get it.

Borrower Eligibility for Multiple SBA Loans

There is nothing inherently stopping a business from taking out multiple SBA loans, whether those be SBA 504 loans, SBA 7(a) loans, or even SBA microloans. However, in order to have multiple SBA loans, a business needs to:

  • Have enough collateral to cover both their existing SBA loan(s) and their new SBA loan

  • Remain within the maximum borrowing amount for the kind of loan they’re borrowing (i.e. $5 million for SBA 504 loans)

  • Be current on all payments for their existing SBA loan(s)

  • Maintain an excellent credit score (ideally 680+)

How to Take Out More Than One SBA 504 Loan

In general, there are two ways that a borrower can take out multiple SBA 504 loans. One is to go green with the SBA 504 Green Energy Program. This incentive allows borrowers to take out up to $5.5 million per project, instead of $5.5 million for the business as a whole. In order to qualify for the SBA Green Energy Program, a business must build or purchase a building that uses at least 10% less energy than their current one, or, they can offset 10% of their current energy use with renewable power sources, like wind, solar, or geothermal energy.

If you cannot go green, you can still take out an additional 504 loan so long as your total amount borrowed does not exceed $5 million in total funding.

Think of it this way: your business can borrow a total of $5 million in 504 loans over time. You can take out as many loans as needed to reach that total amount. And, you can take out as many loans as you want from a conventional lender, but the SBA/CDC will only account for 40% of the funds, topping out at $5 million.

We’re here to help you get the commercial financing you need. Simply fill out the form below for a risk-free consultation and a free SBA loan quote!

Related Questions

What are the requirements for taking out multiple SBA 504 loans?

There is nothing inherently stopping a business from taking out multiple SBA loans, whether those be SBA 504 loans, SBA 7(a) loans, or even SBA microloans. However, in order to have multiple SBA loans, a business needs to:

  • Have enough collateral to cover both their existing SBA loan(s) and their new SBA loan
  • Remain within the maximum borrowing amount for the kind of loan they’re borrowing (i.e. $5 million for SBA 504 loans)
  • Be current on all payments for their existing SBA loan(s)
  • Maintain an excellent credit score (ideally 680+)

In general, there are two ways that a borrower can take out multiple SBA 504 loans. One is to go green with the SBA 504 Green Energy Program. This incentive allows borrowers to take out up to $5.5 million per project, instead of $5.5 million for the business as a whole. In order to qualify for the SBA Green Energy Program, a business must build or purchase a building that uses at least 10% less energy than their current one, or, they can offset 10% of their current energy use with renewable power sources, like wind, solar, or geothermal energy.

If you cannot go green, you can still take out an additional 504 loan so long as your total amount borrowed does not exceed $5 million in total funding.

Think of it this way: your business can borrow a total of $5 million in 504 loans over time. You can take out as many loans as needed to reach that total amount. And, you can take out as many loans as you want from a conventional lender, but the SBA/CDC will only account for 40% of the funds, topping out at $5 million.

How do I apply for multiple SBA 504 loans?

You can take out multiple SBA 504 loans over time in order to build a successful business. To apply for multiple SBA 504 loans, you must first verify your eligibility, check your credit, find a lender or CDC, get pre-qualified, decide on your purchase, and complete the application. You can download the loan application as a PDF file from the SBA.

What are the benefits of taking out multiple SBA 504 loans?

The benefits of taking out multiple SBA 504 loans include the ability to borrow up to $5 million in total funding, the ability to go green with the SBA 504 Green Energy Program, and the ability to offset 10% of your current energy use with renewable power sources. Additionally, the SBA/CDC will only account for 40% of the funds, topping out at $5 million.

For more information, please visit https://sba504.loans/sba-504-blog/can-you-take-out-multiple-sba-504-loans and https://www.nrel.gov/docs/gen/fy17/66878.pdf.

What are the risks associated with taking out multiple SBA 504 loans?

The risks associated with taking out multiple SBA 504 loans include the potential for defaulting on the loan if the business is unable to make payments, as well as the potential for the business to become over-leveraged and unable to pay back the loan. Additionally, if the business is unable to meet the requirements for the loan, such as having enough collateral to cover both the existing and new loan, or maintaining an excellent credit score, then the loan may not be approved.

For more information, please see the following sources:

  • Can You Take Out Multiple SBA 504 Loans?
  • Compare SBA Loans
  • What is the SBA 504 Loan?
  • SBA 504 Loans vs. 7(a) Loans
  • Improving Business Credit for SBA 504 Loans

How long does it take to get approved for multiple SBA 504 loans?

The length of time required for multiple SBA 504 loans to be approved can vary drastically, but averages between 60 and 90 days. With that being said, it may take up to six months in some situations. There is no hard and fast rule here, and each situation will be unique. Factors that go into determining the length of time to loan approval include:

  • Your ability to gather all required information
  • Your ability to satisfy all lender requirements for information and proof of income
  • SBA approval (up to 7 days)
  • Due diligence (2 to 3 weeks)
  • Closing (up to 14 days)

For more information on loan requirements, please visit https://sba504.loans/loan-requirements.

In this article:
  1. Can a Borrower Have More Than One SBA 504 Loan?
  2. Borrower Eligibility for Multiple SBA Loans
  3. How to Take Out More Than One SBA 504 Loan
  4. Related questions
  5. Get Financing
Tags
  • SBA 504 Loan
  • SBA 504 Loans
  • SBA 504 Loan Uses
  • SBA 504 vs. SBA 7a
  • 504 vs. 7a Loans
  • Combining SBA 7(a) and SBA 504 Loans
  • Multiple SBA 504 Loans
  • Multiple SBA Loans

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