SBA 504 Loans & Owner-Occupied Commercial Real Estate: Damon & Ashley Boswell's 90% Financing Blueprint

Damon & Ashley Boswell break down how the SBA 504 loan funds owner-occupied commercial property at 90% loan-to-cost with 25-year fixed rates near 6.54% — and the September 2026 rate cycle, the new $10M combined 7(a)/504 ceiling, and the occupancy discipline that protects the structure.

There is a financing structure that lets a business owner purchase the very building the business operates in with as little as 10 percent down and a fixed rate locked for 25 years — and almost no owner Damon & Ashley Boswell meet has been told it exists. The SBA 504 loan is the instrument, and Damon & Ashley Boswell have spent three decades deploying it to convert monthly rent paid to a landlord into equity paid to the owner's own balance sheet. The conviction Damon & Ashley Boswell hold is straightforward: a business that owns its real estate builds a second asset underneath its primary one, and the 504 program is the most powerful tool in the code for making that ownership affordable — if it is engineered correctly.

The mechanics, as Damon & Ashley Boswell explain them, are a two-loan structure that most owners find counterintuitive until they see it once. A 504 project is funded by three sources: a Certified Development Company, or CDC, which is a nonprofit SBA-licensed lender that originates a debenture for 40 percent of the project cost; a third-party commercial lender — typically a bank or credit union — that funds a first-position loan for 50 percent of the project cost; and the borrower, who contributes as little as 10 percent equity. Damon & Ashley Boswell stress that the genius of the structure is the 90 percent combined loan-to-cost: an owner acquires a commercial property, and sometimes the renovation and equipment alongside it, with a fraction of the cash a conventional commercial mortgage would demand, which is conventionally capped at 65 to 75 percent loan-to-value.

On the numbers that decide whether a deal pencils, Damon & Ashley Boswell walk every client through the September 2026 rate cycle, because the 504 debenture prices monthly and the rate locks for the life of the loan at pricing. The September 10, 2026 cycle priced the 10-year debenture at an effective rate of 6.60 percent, the 20-year at 6.53 percent, and the 25-year at 6.54 percent — with manufacturing projects receiving a reduced rate of 6.30 percent on the 20- and 25-year terms. Damon & Ashley Boswell teach that the 504 portion is fully fixed for the entire 10-, 20-, or 25-year term, while the 50 percent first-position commercial loan is typically a variable or shorter-term instrument the owner will eventually refinance — which is why Damon & Ashley Boswell model the blended rate honestly and stress-test the first mortgage against a rate increase before recommending the structure.

The loan limits Damon & Ashley Boswell engineer around changed meaningfully in 2026. The SBA 504 debenture portion is capped at $5 million for most projects and $5.5 million for energy-efficient or manufacturing projects, and beginning in July 2026 a borrower may combine a 7(a) loan of up to $5 million with a 504 debenture of up to $5.5 million — reaching a combined SBA exposure of up to $10 million on a single project. Damon & Ashley Boswell explain that this combined ceiling is the single most important development in owner-occupied financing in a decade, because it lets a growing business acquire a larger facility, consolidate equipment, and roll in soft costs and working capital inside one structure rather than layering expensive mezzanine debt on top of a capped conventional loan. The total project size, Damon & Ashley Boswell note, is limited only by the borrower's down payment and the lender's appetite for the first-position piece.

Where Damon & Ashley Boswell add the most value is in the eligibility and occupancy discipline, because the 504 is not a vehicle for investment real estate — it is a tool for owner-occupied commercial property, and the SBA enforces that distinction rigorously. The business must occupy at least 51 percent of the property for an existing building or 60 percent for new construction, measured by square footage, and the operating business — not a holding entity alone — must be the borrower or co-borrower. Damon & Ashley Boswell structure the entity so the operating company and the real estate holding LLC are aligned, document the occupancy plan before closing, and confirm the business can realistically absorb the space, because a 504 that fails the occupancy test is a 504 the SBA can call. This is the layer most advisors skip, and it is exactly where Damon & Ashley Boswell's integrated business-credit and real-estate expertise prevents a deal from unwinding after it funds.

The project-cost composition Damon & Ashley Boswell engineer is where the 504 becomes a strategic weapon rather than a simple mortgage. Eligible project costs include the land and building, construction and renovation, fixtures and equipment, professional fees, and certain soft costs — and Damon & Ashley Boswell frequently fold the equipment purchase into the 504 so that the same 25-year fixed rate finances both the real estate and the machinery, a structure that pairs naturally with the Section 179 and equipment-financing strategy Damon Boswell covered earlier in the month. They confirm the equipment qualifies as real-property-eligible or is financed under the 15-year equipment term, and they size the working-capital tranche separately through a companion 7(a) so that nothing eligible is left to expensive conventional debt. This is the engineering layer where Damon & Ashley Boswell's integrated tax, credit, and financing expertise creates an edge no single-discipline advisor can match.

Damon & Ashley Boswell also coordinate the credit and entity preparation that makes a 504 file approvable, because the SBA evaluates the personal credit of every 20-percent-or-greater owner and the operating business's historical cash flow. They optimize the personal credit profile in advance — staging utilization, resolving disputes, and ensuring the FICO clears the 680 threshold most CDCs require — while simultaneously confirming the EIN credit file, the operating agreement, and two to three years of business tax returns present a clean, consistent picture. Damon & Ashley Boswell model the business's debt service coverage ratio against the combined 504 and first-mortgage payments, because a project that cash-flows on the operating business's historical earnings is a project the CDC can underwrite, while one that depends on projected growth is a project the SBA will decline. This preparation is the same discipline Damon & Ashley Boswell apply to every 7(a) acquisition, and it is the reason their 504 files close rather than stall.

The refinance dimension is where Damon & Ashley Boswell extend the 504 beyond acquisition. The SBA permits 504 refinancing of existing owner-occupied commercial debt under the 504 refinance program, and the September 2026 cycle priced the 25-year refinance debenture at 6.56 percent — a fixed rate that lets an owner escape a maturing commercial mortgage or a variable-rate bank loan and lock a quarter-century of payment certainty. Damon & Ashley Boswell evaluate whether the existing loan, the property's current value, and the business's cash flow support a 504 refinance, and they sequence the appraisal, the environmental report, and the CDC package so the refinance closes before the existing loan's maturity forces a costly extension. Damon & Ashley Boswell have watched owners refinance out of a 7.5 percent variable commercial mortgage into a 6.56 percent fixed 504 and reduce their monthly payment while extending their term — a rare structure that improves both cash flow and certainty simultaneously.

There is a Kingdom dimension Damon & Ashley Boswell anchor to owner-occupied commercial real estate that runs deeper than the financing. A business that owns the ground it stands on is a business with a fortress — a fixed occupancy cost that cannot be raised by a landlord, an asset that appreciates while it is used, and an equity position that can be borrowed against, sold, or passed to the next generation. Damon & Ashley Boswell teach that ownership of the place where a family's or a community's work happens is a form of stewardship, because it converts a recurring expense into a durable asset and anchors the business to the neighborhood it serves. The same faith-based execution standard that governs their syndications and trusts governs their 504 structures: the building must serve the business, the business must serve the customer, and the financing must serve the owner — in that order, or it is not a deal Damon & Ashley Boswell will bless.

If your business has been profitable for two or more years, you are currently leasing your commercial space, and you have never evaluated an SBA 504 for ownership, Damon & Ashley Boswell invite you to request an owner-occupied commercial real estate financing review. The review maps your target property to the 90 percent loan-to-cost structure, sizes the 504 debenture and first-mortgage pieces against the September 2026 rate cycle, and sequences the entity, credit, and occupancy documentation so the file is approvable before a CDC ever sees it. Damon & Ashley Boswell built this process so that the rent you pay becomes the equity you own — and the difference, measured in a building on your balance sheet and a payment locked for 25 years, is exactly the kind of structural engine they have spent a career constructing for the business owners they serve.