• Long-Term below market Fixed-Rate financing
• Equity requirement as low as 10% – preserves working capital
• Lender can provide 90% financing for borrower
• Lender can participate in larger transactions
• Lender in first lien position - 50% loan-to-value allows more opportunity to get a project completed

The Lender makes a loan in the first trust deed lien position for 50% of the total project. Capital CDC issues a loan in the second trust deed lien position for 40% of the total project. Borrower contributes 10% of total project. Loan packaging is handled by Capital CDC.

Percentages refer to Total Project Costs

15% contribution if project is a start-up or single-purpose building

20% contribution if project is a start-up and single-purpose building

* Start-up: businesses in operation less than 2 years.

• The business is considered a startup (usually a business operating for two years or less is considered a startup)
-OR-
• The project being financed is appraised as a single-use facility (i.e. a business that will always be the same type business no matter the owner - examples: hotels, movie theaters, etc.)

• It is both a startup AND the project is appraised as a single-use facility (ex. A startup hotel project)

Generally, up to 90% of the total project cost or appraised value of the property, whichever is the lesser amount. There is no limit on the bank portion of the loan. The SBA portion has recently been increased to the following amounts: up to $1.5 million for regular loans, up to $2 million for loans that meet certain Public Policy Goals, and up to $4 million for businesses qualifying as Small Manufacturers. Small business owners thinking of incorporating green technologies at their facilities are now eligible to borrow more money to make it happen. The following type projects are now eligible for an increase in 504 financing - $4 million for reduction of energy use by 10%; $4 million for renewable energy or renewable fuels production; and $2 million for sustainable design.

• Job creation or retention (one job per every $65,000 borrowed from CDC under SBA 504 Program – one job per every $100,000 borrowed from the CDC for manufacturers);
-OR-
• One of the following public policy goals to:
• Revitalize a business district of a community with a written revitalization or development plan
• Expand exports
• Expand minority business development (owned 51% or more by minority business person)
• Aiding rural development
• Change necessitated by federal budget cutbacks
• Change required by mandated standard (re: health, safety, environment)
• Increase productivity & competitiveness (retooling, robotics, or modernization)
• Expand woman-owned business development (51%)
• Expand veteran-owned business development (51%)
• LEED certified projects, at any level— Certified, Silver, Gold or Platinum— or using any other rating system that shows the increased use of sustainable, low impact design
• Projects that reduce energy consumption by at least 10 percent
• Projects that generate renewable energy or fuels, such as biofuels

The use of sustainable design makes a business eligible for an SBA 504 loan at the $2 million level. Even better, debentures of up to $4 million are available for projects that reduce energy consumption by 10 percent or generate renewable energy or fuels.

For projects generating renewable energy, it does not need to be the business’s primary business activity, just a method of meeting its own energy needs. Under this interpretation, projects in any industry could, for example, purchase solar panels for their own use and qualify. This is great news for small businesses and a great inspiration to go green.

The lender’s portion is typically amortized over 20 to 25 years with a minimum term of 10 years or up to a maximum of 25 years. Rate term and fees are negotiable between the borrower and lender.

Capital CDC’s portion can be offered with two term options of 10 or 20 years fully amortized. The interest rate on a 504 loan is set at an increment above the current market rate for five-year and ten-year U.S. Treasury issues. Fees are approximately 2.25% to 3.00% of the loan amount. All fees are financed in the 504 Loan.

• Business Net Worth not to exceed $8.5 million,
• Average Net Profit after taxes for 2 consecutive years not to exceed $3.0 million, or
• The business may qualify under 7(a) size standards (manufacturers of 500 employees or less).

• 51% owner occupancy for existing building purchase, or
• 60% owner occupancy for new construction,
• If the project is equipment only, the equipment must have a minimum 10 year economic life.

• Non-profits
• Speculative development
• Lending institutions, insurance companies
• Gambling concerns and private clubs

• Refinancing of non-eligible 504 items (i.e. working capital, inventory, etc.)
• Working capital
• Inventory
• Rolling stock

Not at all! When applying for an SBA 504 Loan - as with any loan - you are asked to provide standardized application type information and to also provide certain specific documentation. At Capital CDC, we provide a checklist to simplify the process, will work with your accountant and lender, and do all of the analysis, packaging, and SBA interfacing for you. Our role is to keep the process easy for our borrowers.

The paperwork is comparable to that of any business loan. Loan Officers at Capital CDC work with borrowers to help them complete the requirements and process the application.

Yes, SBA 504 loans are fully assumable, upon qualification.

The Small Business Administration (SBA) now permits a limited amount of debt refinancing, under certain circumstances, as part of the 504 Loan Program. This is a permanent change to the 504 Program.

Under the changes in the program, small businesses now can refinance existing debt related to fixed assets if they also borrow money to finance more real estate or equipment through an expansion project. The amount of debt being refinanced must be 50% or less of the total cost of the expansion. Working capital, inventory, or other intangibles are ineligible for refinancing, at this time.

Yes, the down payment can also be in the form of the value of previously acquired land (which can include building(s), structures, and other site improvements that will be part of the project property).

If you decide to use the SBA 504 Loan Program, Capital CDC can recommend a bank or lender to make the loan. Or we will work with any bank of your choice, wherever it is located.

Capital CDC primarily focuses on commercial real estate loans, but we can recommend a lender that might be able to assist you. Feel free to contact us so we can hear about your project and discuss your options.

Our experienced Loan Officers can provide you with loan pre-qualification in just 1 business day. The complete procedure from application submission to disbursement of funds takes approximately 2-4 weeks, depending on the complexity of the loan.

At Capital CDC, we serve our customers with professionalism, honesty and expertise. We're extremely knowledgeable in the field, and try to match our customers' financial needs and expectations to the most appropriate program available.

We will work with your current bank or help you identify a lender to participate in the 1st trust deed portion of your financing. To speak with a Loan Officer in more detail, submit some brief information on our Contact Us page inquiry or call (800) 504-CCDC (2232).