| Revision as of 06:24, 25 October 2009 editAbductive (talk | contribs)Autopatrolled, Extended confirmed users, Pending changes reviewers, Rollbackers128,803 edits external link : http://www.sba.gov/financialassistance/borrowers/guaranteed/CDC504lp/index.html← Previous edit | Revision as of 06:27, 25 October 2009 edit undoAbductive (talk | contribs)Autopatrolled, Extended confirmed users, Pending changes reviewers, Rollbackers128,803 edits ceNext edit → | ||
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| The '''504 Loan''' or '''Certified Development Company''' program is designed to provide financing for the purchase of ], which usually means ] and |
The '''504 Loan''' or '''Certified Development Company''' program is designed to provide financing for the purchase of ], which usually means ], buildings and machinery, at below ]s.<ref>{{cite book |title=Raising Capital |last=Vance |first=David E. |authorlink= |coauthors= |year=2005 |publisher=Springer |location= |isbn=978-0387253190 |page=64 |pages=378 |url= |accessdate=25 October 2009 }}</ref> As part of its mission to promote the development of businesses in the US, the ] offers a number of ]s tailored to specific ] needs of growing businesses. The 504 program works by distributing the loan among three parties. The business owner puts up 10%, a conventional lender (typically a ]) puts up 50%, and a so-called Certified Development Company (CDC) puts up the remaining 40%. Certified Development Companies are established under the 504 ] as non-profit corporations set up to support economic growth in their local areas. There are a few hundred such CDCs nationwide.<ref>{{cite book |title=Small Business for Dummies |last=Tyson |first=Eric |authorlink= |coauthors=Jim Schell |year=2008 |publisher=Wiley |location= |isbn=978-0470177471 |page=88 |pages=410 |url= |accessdate=25 October 2009 |edition=3}}</ref> The maximum amount of the loan is $1 million, and if the borrower defaults, the private sector lender is paid off first, reducing the risk to the lender and encouraging loans. | ||
| ==References== | ==References== | ||
Revision as of 06:27, 25 October 2009
The 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market rates. As part of its mission to promote the development of businesses in the US, the Small Business Administration offers a number of loans tailored to specific capital needs of growing businesses. The 504 program works by distributing the loan among three parties. The business owner puts up 10%, a conventional lender (typically a bank) puts up 50%, and a so-called Certified Development Company (CDC) puts up the remaining 40%. Certified Development Companies are established under the 504 code as non-profit corporations set up to support economic growth in their local areas. There are a few hundred such CDCs nationwide. The maximum amount of the loan is $1 million, and if the borrower defaults, the private sector lender is paid off first, reducing the risk to the lender and encouraging loans.
References
- Vance, David E. (2005). Raising Capital. Springer. p. 64. ISBN 978-0387253190.
{{cite book}}:|access-date=requires|url=(help); Cite has empty unknown parameter:|coauthors=(help); More than one of|pages=and|page=specified (help) - Tyson, Eric (2008). Small Business for Dummies (3 ed.). Wiley. p. 88. ISBN 978-0470177471.
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External links
CDC/504 loan program at the SBA
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