The “7(a) Loan” program is authorized under section 7(a) of the Small Business Act, and the “504 Loan” program is authorized under section 504 of the Small Business Act. In the most basic terms, a “7(a) Loan” is a general purpose small business loan originated by a conventional lender and guaranteed by the SBA, intended to be used for short-term or long-term working capital and to purchase an existing business, refinance existing business debt, or purchase furniture, fixtures and supplies, among other purposes. Generally, 7(a) loans are small loans up to $350,000, but can go as high as a maximum of $5,000,000. A “504 Loan” is intended to be used to buy a building, finance ground-up construction or building improvements, or purchase heavy machinery and equipment. The 504 loan program works by distributing the loan among three parties. The business owner puts up a minimum of 10%, a conventional lender (usually a bank) puts up 50% and is typically secured by a first position mortgage, and a so-called Certified Development Company (CDC) puts up the remaining 40% (which is guaranteed by SBA) and is typically secured by a second position mortgage (referred to as a “Debenture”).