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Certified Development Company (504) Loan Program
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The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. Generally, A private investor will provide 50% of the project cost, the Certified Development Company (backed by SBA) will provide 40% of the cost, and the business applicant will provide 10% equity injection. The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
General Program Requirements
To be eligible, the business must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, the business qualifies as small if it does not have a tangible net worth in excess of $8.5 million and does not have an average net income in excess of $3 million after taxes for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.
The interest rate is pegged to an increment above five and 10 year Treasury Issues. The length of the loan can be either 10 or 20 years. The maximum loan amount is general $1million, but can be $1.3 million for public policy goals.
Your Next Steps
The following information will lead you to the next steps to apply for this benefit.
For more information, see the Program Contact Information below.
Program Contact Information
For more information on this program, please visit:
U.S. Small Business Administration