SBA 504 Financing Structure

OSDC partners with a participating lender to provide the appropriate financing solution. The lender holds a first mortgage and/or lien filing and OSDC/SBA provides permanent, subordinate financing.

  • A bank or other lender provides 50% of the required financing for an eligible project.
  • OSDC provides up to a maximum of 40% of required financing for the purchase, construction or improvement of fixed assets.
  • The business contributes a minimum of 10% as an equity injection.


  1. $500 non-refundable application fee.
  2. 2.15% of SBA loan portion, financed into loan.
  3. ½ of 1% of lender loan amount.
  4. Reasonable legal, closing and related costs

Example Project: Acquisition of land and building for $500,000.00

Uses Sources
Bldg Acq.  $500,000 50% Bank $250,000
40% 504 $200,000
10% Equity $50,000
 Total        $500,000  Total $500,000

1) Application Fee:A $500.00 (non refundable) application fee is to be paid to OSDC prior to the submission of an application package to the SBA.

2) Processing Fees:




20-year loans


10-year loans


Funding Fee .0025 .0025
CDC Processing Fee .015 .015
Underwriter’s Fee .004 .00375
Total: .0215 .02125
Total Fees: .0215 x $200,000 = $4,300 .02125 x $200,000 = $4,250

Note: Fee amount is always rounded up to the next even thousand. The difference is returned to the borrower when the loan is funded.

3) Closing Costs: The closing costs will fluctuate as determined by attorney fees, title insurance cost and recording fees. A maximum amount of $2,500 can be financed and added to the loan amount for closing costs.

4) Third Party Lender Participation Fee: This fee is collected from the third party lender that holds the first mortgage or lien on the project collateral. The fee is equal to one half of one percent of the first mortgage amount (excluding any existing mortgage that was refinanced). The check should be made payable to Ohio Statewide Development Corporation.

Formula: .005 x $250,000 = $1,250

5) Summary of Fees:


Fee 20-year loan 10-year loan
Application Fee $500 $500
Processing Fee $4,300 $4,250
Closing Costs $2,500 $2,500
Bank Participation Fee $1,250 $1,250
Total Cost of Fees: $8,550 $8,500


Interest rates:

504 Rate History (Past Six Months)
10-year* 20-year 25-year
September 2018 5.25 5.25 5.29
August 2018 5.30 5.30 5.35
July 2018 5.30 5.26 5.32
June 2018 5.29 5.32
May 2018 5.29 5.22
April 2018 5.11 5.03
Effective, full term rates including all on-going servicing fees.
Each month’s rate is fixed for the full term for those loans
included in that specific bond sale.

*10-year bond sales occur in odd-numbered months only. Prepayment penalties apply on a declining basis