SBA 504 vs USDA B&I Loans: Which Is Right for Your Business?

Published on
December 15, 2025

At Guaranteed Lending Specialists (GLS) we primarily specialize in USDA Business & Industry (B&I) financing, often working with businesses trying to determine whether a USDA B&I Loan fits their business needs or if their location and project would be better served by another product, such as an SBA 504 Loan. Both programs are powerful tools, but they’re built for different purposes. 

Why might a Borrower lean toward USDA B&I versus Other Loan Products?

Most borrowers we work with operate or invest in and around rural communities—manufacturers, RV Parks, hospitality, industrial, and service providers. They typically need financing that covers more than real estate alone. USDA B&I shines in these scenarios because it allows for maximum flexibility.

Key Advantages of USDA B&I:

  • High government guarantees (up to 80%) give lenders confidence  
  • Loan sizes commonly reach $25MM  
  • Extremely flexible use of funds—working capital, real estate, equipment, acquisitions  
  • Terms up to 30 years reduce payments and improve DSCR  
  • Ideal for larger, multi-purpose, or higher-leverage rural projects

The USDA B&I Loan Program provides more flexibility for Borrowers and Lenders to tailor the structure based on individual needs. Please utilize our eligibility mapping tool and questionnaire on the blog to determine if USDA B&I is the right loan product for you.

Why might a Borrower lean toward an SBA 504 Loan?

SBA 504 loan are better suited for Borrowers procuring owner-occupied commercial real estate or heavy equipment in a location that is not eligible for USDA B&I financing. This product has a number of advantages, similar to USDA.

Key Advantages of SBA 504:

  • Low equity requirement (often 10%)
  • Long fixed-rate amortization increases affordability
  • CDC takes second position, lowering Lender risk
  • Ideal for real estate-heavy expansion deals
  • Great fit for manufacturers and owner-occupied properties

Both programs have strengths, but USDA B&I dominates when flexibility, loan size, or rural eligibility are key. SBA 504 serves borrowers best when the need is straightforward owner-occupied real estate or equipment with predictable terms. If you need a tailored recommendation or want packaging assistance for a USDA B&I submission, please don’t hesitate to reach out to ensure your deal is structured properly from day one.

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