SBA 504 Loan Public policy and community development goals.

The 504 Loan Program is the only SBA business loan program with a statutory requirement to promote local economic development through job creation or retention, or meeting a public policy or community development goal. Projects must meet a minimum job creation/retention goal of one job for every $90,000 in 504 funds (one job for every $140,000 for manufacturers).

Examples of public policy/community development goals include, 1) aiding rural development, 2) assisting small manufacturers, 3) increasing productivity and competitiveness, and 4) expansion of minority owned and veteran owned businesses.

SBA 504 Loans: SBA’s Premier Economic Development Program

The 504 Loan Program provides financing for fixed assets – commercial real estate and heavy equipment – to help small businesses grow and create jobs. The hallmarks of the program include a partnership between a CDC and a Bank, and that borrowers meet one of two economic development requirements to obtain a loan – either create and retain jobs, or meet a public policy or community development goal.

Certified Development Company (CDC): Building Local Communities

A CDC is a non-profit small business lender that is certified by, but independent of, the SBA. CDCs have been in existence for over 60 years with a mission to foster economic development. They are committed to helping small businesses access capital, build local communities, and create and retain jobs. There are approximately 200 CDCs across the nation and each serves a particular region. All CDCs deliver 504 loans and many provide additional products from federal, state and local programs. Unique to CDCs, these non-profits also invest their own dollars into local economic development initiatives to drive even greater impact.

Meeting the Needs of Small Businesses

• Preserve cash with low down payment of only 10% - conventional loans are 20-30%. This allows businesses to hire more people and manage cash flow for growth-related business costs.

• Long repayment terms of 25, 20 and 10 years, which reduces the monthly payment, making the loan affordable for businesses.

• Below market fixed rate provides a set occupancy cost, which helps the business owner more accurately plan for the future.

A Successful Public Private Partnership

Competitive National Economy

SBA and its programs were created with the understanding that a strong small business sector is integral to a competitive national economy. Today, and in the future, the CDC lending industry is leading awareness of, and expansion of access to, the 504 Loan Program, knowing the resulting economic development is foundational to a thriving economy.

Who knew? SBA 504 loans are like a box of chocolates - you can keep coming back for more!

This flexibility allows businesses to continue expanding, upgrading equipment, or purchasing additional commercial real estate as needed. The SBA 504 loan program provides long-term, fixed-rate financing with lower down payments, making it an attractive option for small business owners. By leveraging this financial tool, businesses can more effectively manage cash flow while investing in growth opportunities.

Whether you're looking to renovate your current facility, buy new machinery, or acquire additional property, the SBA 504 loan program offers a viable solution to support your business's ongoing success and development.

Contact Small Business Capital Corporation to learn more!