The 504 program provides long-term, fixed-asset financing through Certified Development Companies (CDC). These non-profit corporations are sponsored by private-sector organizations or by state and local governments to contribute to economic development.
The SBA can guarantee debentures covering as much as 40% of a 504 project. A Borrower will need to inject at least 10% of the total project; the remaining 50% of the financing is completed via a direct, non-SBA guaranteed loan from the Bank. The maximum SBA debenture generally is $1 million; but can go as high as $1.3 million for those loans that fulfill a public policy goal. The SBA debenture (CDC portion) must create or retain at least one job for every $35,000 of debenture proceeds.