Rappahannock Economic
Development Corporation
Services

Time to Expand? What Next?

Found that perfect building or track of land, but your banker says you need 20% down? Can't afford 20%? Plus pay for renovations and soft costs and still have enough working capital left over for the expansion? Well, REDCO, your local SBA 504 Certified Development Company can help by making you a loan to buy that building through the SBA 504 Loan Program. Only 10% down by you. All eligible project costs are included-land, building, renovation and soft costs. The loans are long term and provide a low fixed interest rate. The SBA 504 Loan Program can even finance the machinery you need to buy.

Benefits for the Small Business

Low down payment, as low as 10%
Long-term, low fixed rate
Keep more of your cash for working capital
Secong trust mortgage financing
Project Financing - allows you to finance soft costs and other related expenses
REDCO does the SBA paperwork for you

Excellent loan to value

U.S. Government as subordinate lender

Market interest rate on participating first trust lender's loans

Community Reinvestment Act credits for the bank

504 effectively extends the lender's ability to service large clients

Timely loan packaging and approval processing

No SBA paperwork for lender

REDCO Can Answer All Your Loan Questions

The REDCO Professionals work directly with you as they prepare the entire SBA application on your behalf. REDCO fits all the pieces together to ensure your loan package meets the 504 program guidellines and the credit criteria of the SBA.
SBA Definition of the 504 Loan Program:  Certified Development Company (CDC),
a SBA 504 Loan Program

FUNCTION:  Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically an SBA 504 project includes a loan obtained from a private-sector lender with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total eligible project costs, and a contribution of at least 10 percent equity from the borrower.  

CUSTOMER:  Small businesses requiring “brick and mortar” financing

DELIVERED THROUGH:  Certified development companies (private, nonprofit corporations set up to contribute to the economic development of their communities or regions)

 www.sba.gov/financing/sbaloan/cdc504.html 

SBA is committed to helping small businesses in the U.S. and in Virginia. Helpful Links for Small Businesses, Woman Owned Business and Minority Owned Businesses.