With down payments as low as 10% and long-term fixed rates, an SBA 504 loan makes funding attainable so your business can continue to grow without missing a beat. Loans cannot be made to businesses engaged in nonprofit, passive or speculative activities. Public Benefit Requirements To be eligible for a loan through the 504 loan program, small business projects must either create or retain jobs, meet one of 15 community development or public policy goals,12 or meet one of the Energy Public Policy goals.13 The SBA … 504 loans … Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs. Plan, equipment and process upgrades or renewable energy sources such as the small-scale production of energy for individual buildings or communities consumption, commonly known as micropower, or renewable fuels producers including biodiesel and ethanol producers. The SBA 504 Loan program represents permanent financing and is an economic development program utilizing job creation. The SBA 504 Loan program is a powerful economic development loan program that offers small businesses another avenue for business financing, while promoting business growth, and job creation. CDCs are certified and regulated by the SBA, and work with SBA and participating lenders (typically banks) to provide financing to small businesses, which in turn, accomplishes the goal of community economic development. Women-Owned Small Business Federal Contracting program, Service-Disabled Veteran-Owned Small Business Concern program, Natural Resource Sales Assistance program, Commercial market representative directory, Procurement center representative directory, SBA Revises OCA Regulations on 504 and 7(a) Loan Program, Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC), Small Business Owner Receives 504 Loan, Moves into Larger Facility, Small Business Owner Receives 504 Loan to Re-build Business, Small Business Owner Receives 504 Loan, Purchases Office and Warehouse Space, Small Business Achieves Growth with 504 Loan, Small Business Owner Expands with 504 Loan, Adding Jobs, National Resource Guides (English/Spanish), $500,000, 1st lien with bank (loan obtained from a private sector lender covering up to 50% of the total project cost), $400,000, 2nd lien with 504 loan, 20 year, fixed rate  (loan obtained through a CDC, funded through an SBA-guaranteed debenture, covering up to 40% of the total project cost), $100,000, borrower contribution (contribution from the borrower of at least 10% of the total project cost/). Learn more here. Consolidate existing debt (balloon and/or high interest rate loans), Lock in long-term, stable financing, reducing fluctuating expenses, Finance eligible business expenses, saving needed cash-flow, Protect jobs and hire additional staff, supporting the local community, Include closing costs in the transaction, eliminating cash-flow drain, The debt to be refinanced is a commercial loan which was incurred not less than 2 years prior to the date of application, including any prior refinancing of the debt;Â. Substantially all (85%) of the proceeds of the original debt being refinanced must have been used for 504 eligible purposes (acquisitions, construction or improvement of long-term fixed assets) and the remaining (15% or less) must have been incurred for the benefit of the small business; The debt to be refinanced must be secured by eligible fixed assets; The project also may include using available equity to pay eligible business expenses; The small business must have been in operation for two years or more (no start-ups); and. A CDC is a nonprofit corporation whose mission is to contribute to the economic development of its community. The 504 Program provides growing businesses with long-term, fixed-rate financing for owner-occupied real estate and heavy equipment.  As this program is time-limited, it’s important to act now if you are looking to refinance! Â. Existing SBA 504 loans, SBA guaranteed loans, and other government-guaranteed loans are not eligible to be refinanced. Community Development Resources is a Community Development Company (CDC) and has an active SBA 504 Loan Guaranty program for existing … Black Hills Community Economic Development operates as a Certified Development … As the SBA’s flagship loan program, CDC/SBA 504 loans are made available through Certified Development Companies (CDCs)—that is, nonprofit corporations that promote economic development within their communities—and are guaranteed by the SBA. One provided by an SBA Preferred Lending Partner and another by an SBA Community Development Corporation (CDC). For questions about the 504 Loan Program, please contact your local SBA District office. The U.S. Small Business Administration 's SBA 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, … This fact sheet highlights the SBA’s Certified Development Company/504 Loan Program (504 loan program). To contact a CDC in your area, first use this link to locate your local SBA District Office. A 504 loan provides small businesses with long-term, fixed-rate financing to acquire fixed assets for purchase, construction, expansion, or modernization. The 504 Program provides small businesses requiring “brick and mortar” financing with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. 2) A loan secured with a junior lien from a CDC (like us at BFC) covering up to 40 percent of the cost, and backed by a 100 percent SBA-guaranteed debenture. Not sure where to start? CDCs work with SBA and private sector lenders to provide financing to small businesses.

, CDC Checklist for Submitting Real Estate Appraisal. Private sector lenders, CDCs, and the SBA … This program can help businesses get … According to the SBA, “A Certified Development Company (CDC) is a nonprofit organization that promotes economic development within its community through 504 loans. The SBA 504 Loan has three components: 1) Direct commercial loan from the private sector covering 50 percent of the project, and secured by a senior lien. trucks) or refinancing of … The SBA 504 loan program is a financing tool, designed to encourage economic development within a community. The debt refinancing must not involve expansion of the small business (however, this may be eligible under the regular 504 loan program). This program is a proven success and win-win-win for the small business, the community … The remaining 10 percent will be your small business owner contribution. Most traditional business loans require a 20% down payment and interest rates that aren’t always feasible for a small to medium-sized business. Current Appraised Value of Property              $1,400,000, Outstanding Debt                                               $1,000,000  Â, 90% LTV                                                               $1,260,000, Borrower contribution (equity)                             $140,000                 Â, Working capital (from loan proceeds)               $260,000. Fees may be financed with the loan. As of February 15, 2012, the $50 Billion in 504 loans has created over 2 million jobs. The 504 Loan program offers small businesses both immediate and long-term benefits, so business owners can focus on growing their business.  Some of the top-level benefits include: To be eligible for a 504 Loan, your business must be operated for profit and fall within the size standards set by the SBA. The 504 Loan will be funded by a debenture issued by CDC and guaranteed by the U.S. Small Business Administration (SBA). The SBA 504 loan encourages local economic development It helps to create and retain jobs With the LOWEST DEFAULT AND LOSS RATE of any of the SBA’s financing programs, this loan program is ideal for banks and borrowers There is, of course, a lot more to learn about this powerful loan program. The SBA 504 Loan program is a powerful economic development loan program that offers small businesses another avenue for business financing, while promoting business growth, and job creation. Development, Inc., Rapid City, SD.  Small manufacturers must create or retain a ratio of one job for every $100,000.  As an alternative to job creation or retention, your business may qualify if it meets a community development or public policy goal as long as the CDC maintains its portfolio job average requirements.  These include:Â. ** Generally, a business must create or retain one job for every $65,000 guaranteed by the SBA.  As of February 15, 2012, the $50 Billion in 504 loans has created over 2 million jobs.  This program is a proven success and win-win-win for the small business, the community and participating lenders. As of February 15, 2012, the $50 Billion in 504 loans has created over 2 million jobs. Improving, diversifying or stabilizing the local economy; Assisting manufacturing firms (North American Industry Classification System (NAICS), Sectors 31 to 33) and all of its production facilities located in the United States; or. SBA Revises OCA Regulations on 504 and 7(a) Loan Program to Expand Access to Loan Programs, Streamline the Application Process and Ensure Program Integrity through Enhanced Oversight. For more information click here. Obtaining CRA Credits with SBA 504 Loans In general, loans that don’t fall under the “conventional small business lending” category may be considered as community development loans. SBA 504 Loan Requirements for Borrowers, Projects, Lenders, and More While they are not as stringent as some other types of loans, you will find a wide range of eligibility requirements when it comes to the 504 loan program. As Karen Mills, SBA Administrator commented, “The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years.  As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt.  This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs.”, This program is authorized to provide $7.5 billion in financing and is available until September 27, 2012. It is one of the best financing options available to America’s small businesses. CDC has agreed to make a loan (the 504 Loan) to Borrower and Co-Borrower, if any (Borrower) for purposes of financing the Project described in the “Authorization for Debenture Guarantee (SBA 504 Loan),” as amended (the Authorization).