The US Small Business Administration’s 504 Loan Program, also known as the Certified Development Company Program, provides affordable long term, fixed-rate financing to help healthy, expanding small and medium sized businesses grow. The loans are for acquiring long–term fixed- assets, such as land, buildings, machinery and equipment, or for building modernizing, renovating, or greening facilities. Growing businesses often are unable to qualify for traditional financing because of the difficulty of coming up with a down payment of 25% or more.
When a conventional loan is not possible, a 504 loan may be the answer. The SBA’s 504 Loan Program gives small business owners access to the same low-cost fixed-rate, long-term financing large businesses have through the bond markets. Other borrower advantages include:
- Lower down payment
- Below-market financing
- Fixed-rate financing, which avoids the uncertainties of future market fluctuations
- Longer repayment term (10 to 20 years)
- What is a Certified Development Company (CDC)?
CDC’s are non-profit organizations often established to promote economic development in their communities. Certified by the SBA, CDC’s operate under the jurisdiction of a board that includes members from local private-sector lending institutions, and business and community organizations. Cal Coastal is the only local CDC in Monterey County. A CDC helps small businesses with financing for fixed-asset projects by assembling, analyzing, and reviewing and presenting for SBA approval. Once approved by SBA the loan is documented for closing.
To learn more about the loan, pre-qualify, and for a copy of the loan application, visit this link to the California Coastal Rural Development Corporation.
California Coastal Rural Development Corporation