SBA Extends 504 Loan Savings for Manufacturers Through September 2027

For manufacturers considering purchasing, expanding, or refinancing commercial real estate, financing costs can play a significant role in determining when and how to move forward with a project.

Fortunately, the U.S. Small Business Administration (SBA) has extended its manufacturing fee waivers through fiscal year 2027, creating additional opportunities for eligible businesses to reduce borrowing costs through the SBA 504 Loan Program.

Under the SBA’s FY 2027 fee notice, the extension applies to eligible manufacturers in NAICS sectors 31–33 with loans approved between October 1, 2026, and September 30, 2027.

For commercial real estate brokers and lenders, these continued savings present an opportunity to revisit manufacturing projects, help clients evaluate their financing options, and move forward with facility investments that support long-term business growth.

What the SBA 504 Extension Means for Manufacturers

Our June 2026 post covered these two SBA benefits for manufacturers: fee waivers on 504 loans for facilities and equipment, and the separate  Manufacturer’s Access to Revolving Credit (MARC) program for working capital. 

With this waiver, eligible manufacturers pay no 0.50% upfront SBA guarantee fee and no annual SBA service fee, which is normally 0.203% of the outstanding SBA loan balance for purchases and refinancing with expansion, or 0.204% for refinancing without expansion.

What Does This Mean in Real Dollars?

On an SBA 504 loan of $2,500,000, eligible manufacturers can benefit from:

• One-time SBA guarantee fee waiver of 0.50%, or $12,500.
• Additional interest rate savings below the SBA’s already below-market rate: 0.203% for purchases and refinancing with expansion, or 0.204% for refinancing without expansion.
• At a $2,500,000 outstanding balance, those annual interest rate percentage savings equal $5,075 and $5,100, respectively. Actual savings decrease as the balance is paid down.

On a $2.5 million SBA 504 loan, a 0.203 percentage point reduction from a 6.75% interest rate could save over $95,000 over 25 years, plus a $12,500 upfront fee waiver, bringing total potential savings to more than $107,500.

For CRE brokers and lenders, these savings make SBA 504 financing even more compelling when helping manufacturers secure facilities.

Which Manufacturers May Qualify?

Businesses must meet SBA 504 eligibility and credit requirements, including:

• Operating for profit in the United States.
• Meeting applicable SBA size standards.
• Demonstrating the ability to repay.
• Using financing for an eligible project.
• Having an eligible manufacturing NAICS code in sectors 31–33.

Manufacturing businesses in NAICS sectors 31–33 include, but are not limited to:

How the Extension Can Support Manufacturing Projects

Eligible Expenses

Depending on the project, funds may cover the following costs:

• Land and buildings: Purchase property for the manufacturer’s business operations.
• Construction and renovations: Build, expand, or improve an eligible business facility.
• Machinery and equipment: Purchase long-term equipment with at least 10 years of remaining useful life.
• Essential project fees: Architectural and engineering services, appraisals, environmental studies, title insurance, and qualifying legal fees.
• Construction contingency: A reserve for cost overruns of up to 10% of construction costs.
• Interim financing: Repay eligible project bridge financing, including associated points, fees, and interest.
• Qualified debt refinancing: Refinance existing debt that meets SBA requirements.

Ineligible Expenses

The following expenses are typically not eligible:

• General working capital: Routine payroll, rent, utilities, and other day-to-day operating costs.
• Inventory: Raw materials, supplies, or products held for sale.
• Investment real estate: Property purchased for speculation or passive rental income.
• Personal expenses: Costs unrelated to the business.

Refinancing exception: Certain SBA 504 refinance projects may also  finance eligible business expenses, including operating costs and inventory, subject to SBA rules.

What Commercial Real Estate  Brokers and Lenders Can Do Next

• Revisit postponed projects. Reconnect with clients who delayed a purchase, expansion, or refinance.
• Check the NAICS code on tax returns. If it does not start with 31, 32, or 33 but the business primarily manufactures, ask its CPA to review the classification and update it if appropriate.
• Gather project details. Confirm the business activity, NAICS code, estimated cost, property or equipment needs, and desired timing.
• Compare the full cost. Request a financing estimate, including remaining fees and any refinance prepayment charges.
• Plan around approval. The qualifying window ends September 30, 2027, but keep in mind that submitting an application by that date is not the same as obtaining approval.

Why Partner with Statewide CDC?

Statewide CDC works with participating lenders to provide SBA 504 financing. Its typical project structure includes:

• Participating lender: 50% of total project costs.
• SBA-backed financing through Statewide: Up to 40% of total project costs.
• Borrower contribution: Starting at 10%, depending on the project.

To begin prequalification, gather business and owner tax returns, current financial statements, personal financial statements, a business debt schedule, and a description of the property and planned improvements.

Contact a Statewide CDC loan expert to discuss eligibility, timing, and potential savings.