SBA CDC/504 Loan Program

The SBA's Certified Development Company/504 (CDC/504) loan program acts as a long-term financing tool to enhance economic development within a community by funding franchises and other small businesses. Each of the 270 non-profit CDCs nationwide teams up with the SBA and commercial lenders to provide small businesses with financing. Through financing franchises and other small businesses, the CDCs finance community improvement. The CDC/504 loan program provides businesses with fixed-rate financing perfect for large fixed assets such as land and buildings.

A CDC/504 loan project is usually secured through a senior lien with a commercial lender at up to 50% of the cost of the project. 40% of the project is funded through a junior lien from the CDC, which is backed 100% by an SBA-guaranteed debenture. The business being granted the loan contributes the remaining 10% of the project cost.
CDC/504 loans have maturities of 10 or 20 years. Maximum debentures vary, based on the size of the business and the size of the project. Businesses engaged in speculation or investment in rental real estate are not eligible for this loan program.