The SBA’s new $10 million cumulative lending limit could create significantly more financing capacity for business buyers—but to understand why, you first need to understand how the SBA 504 loan program actually works. In this video, Brad Hettich of Commercial Lending X breaks down the SBA 504 structure and explains why a 504 loan isn’t really one loan—it’s two separate loans packaged together for a single project. Typically, a conventional bank provides 50% of the total project cost, a Certified Development Company (CDC) provides 40% through the SBA 504 program, and the borrower contributes the remaining 10% as equity. Here’s the important part: only the SBA-backed 504 portion counts toward your cumulative SBA limit. Brad walks through the numbers to show how that can translate into a much larger total project—and how the numbers may change when a bank is willing to finance more than the standard 50%. Brad also explains the important differences between SBA 7(a) and SBA 504 financing. The 7(a) program can be used for business acquisitions, working capital, equipment, real estate, and other eligible business purposes, while the 504 program is designed primarily for owner-occupied commercial real estate and fixed assets. And that leads to one of the biggest changes under the new rules: 7(a) and 504 are now separate buckets. That means a qualified borrower may be able to utilize their 7(a) capacity for a business acquisition while still preserving their SBA 504 capacity to finance the real estate. If you’re buying a business, acquiring owner-occupied commercial real estate, or planning multiple SBA-financed transactions, understanding this new structure could dramatically change how you approach your financing strategy.