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    • THE SURPRISING SIMPLICITY, SAFETY, and STRATEGIC ADVANTAGES of CREDIT UNION SBA 504 LENDING

    Introduction. At their core, both the SBA and credit unions are driven by the same mission — to expand access to opportunity and empower everyday Americans to build lasting wealth. The SBA was created to open doors for entrepreneurs who might otherwise be overlooked by traditional lenders. Likewise, credit unions, as member-owned cooperatives, put people before profits, reinvesting earnings to deliver better rates, services, and community impact. Together, this shared commitment makes SBA lending a powerful and natural extension of the credit union mission — helping more members achieve their business dreams while strengthening local economies.

    The commercial real estate (CRE) lending landscape is changing fast. With conventional interest rates still elevated, small business owners are seeking stable, affordable alternatives—and they’re finding them in SBA 504 loans. These government-backed, fixed-rate loans offer below-market interest rates, longer terms, and lower down payments, helping businesses secure property, upgrade facilities, buy equipment, machinery, furniture or fixtures, or in specific instances refinance debt while preserving cash flow.

    For credit unions, this shift presents a powerful opportunity: to grow market share, strengthen member relationships, compete with other financial institutions and position themselves as community champions in small business real estate financing.

     PART ONE:

    SBA 504 LENDING: A BASIC PRIMER

    How SBA 504 Loans Work: An SBA 504 loan uses a three-party structure that offers predictable terms and manageable risk for all parties. The parties include the borrower, the credit union, and a certified development company (CDC). CDCs are SBA-certified nonprofit organizations that support economic development in their  communities.

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