Certified Development Company 504 Loan Program
The Certified Development Company-504 loan program (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. There are about 270 CDCs nationwide. Each CDC covers a specific
geographic area.
Typically, a 504 project includes a loan secured with a senior lien from a
private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior
lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of
the cost, and a contribution of at least 10 percent equity from the small business being
helped.
