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504 Loan Program
The U.S. Small Business Administration (SBA) 504 Loan Program offers small businesses fixed interest rate loans below market rate.
- Available to successful small businesses with expansion plans, and, under some circumstances, for start-up businesses.
- Limited to owners or users. Developers do not qualify for this program.
- Loan proceeds can be used for construction, acquisition, rehabilitation and leasehold improvement of real estate, and for machinery and equipment.
The Small Business Administration 504 loans are packaged through Certified Development Corporations. A list of Certified Development Corporations is provided under local listings.
For more information, contact: 504 Loan Program, U.S. Small Business Administration, 222 S.W. Columbia, Suite 500, Portland, OR 97201; 503-326-2682
Certified Development Company (504) Loan Program
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. A Certified Development Company is a nonprofit 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.
Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment. The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
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 $7.5 million and does not have an average net income in excess of $2.5 million after taxes for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.
Complete program information
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7(a) Loan Guarantee Program
The US SBA offers multiple variations of the 7(a) loan program to accommodate targeted needs.
The Certified Lenders Program (CLP) is designed to provide expeditious service on loan applications received from lenders who have a successful SBA lending track record and a thorough understanding of SBA policies and procedures. The Preferred Lenders Program (PLP) is another step in SBA's process of "streamlining" the procedures necessary to provide financial assistance to the small business community. In addition there is information on SBAExpress, Community Express and Secondary Market Programs at the US SBA web site.
SBA Microloan Program for small businesses
The microloan program provides very small loans to start-up, newly established or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $13,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.
Each intermediary lender has its own lending and credit requirements. However, business owners contemplating application for a microloan should be aware that intermediaries will generally require some type of collateral, and the personal guarantee of the business owner.
Local intermediary participants (PDF)
For non-profit entities seeking to become intermediary lenders
Organizations interested in becoming Intermediaries should contact SBA for information on the application process and should review the regulations published in the Code of Federal Regulations, specifically sections 120.700-120.716.
In order to participate in the program, applicants must meet general criteria.
Complete SBA Micro-Loan information
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