The Certified Development Company SBA 504 Loan Program

The  SBA 504 Loan Program allows business owners to retain critical working capital, as the 504 works in conjunction with a private lender, such as a bank to provide financing of up to 90% of the total eligible project costs. Total eligible costs are typically split three ways; the first trust lender provides 50%, REDCO, the second trust lender, provides up to 40% of the project and the borrower provides 10%, (in some instances the borrower may need to provide up to 20% if the project is a new business and single purpose real estate.  These projects require additional equity contributions).

The CDC SBA 504 Loan Program is a long-term financing tool for economic development within a community.  The SBA 504 Loan Program provides growing businesses with a long-term fixed-rate financing for major fixed assets purchases, such as land and buildings.  A Certified Development Company is a non profit corporation set up to contribute to the economic development of its community.  CDCs work with the SBA and private-sector lenders to provide financing to small businesses.