Inactive

The SBA’s Office of Capital Access (OCA) is responsible for implementing programs to assist small businesses. SBA offers a range of loan programs with the support of its lender community. The 504-loan... The SBA’s Office of Capital Access (OCA) is responsible for implementing programs to assist small businesses. SBA offers a range of loan programs with the support of its lender community. The 504-loan program is a finance vehicle that provides long term, fixed rate loans for fixed assets. SBA-certified State or local development companies (Certified Development Companies or CDCs) partner with SBA to finance 504 loans. CDCs use proceeds of debentures issued to fund loans to small business concerns (the Small Business Concerns or SBCs), as defined in the regulations of SBA, for the various business purposes. A 504 project has three components. The typical deal structure consists of a third-party loan secured with a senior lien on the financed asset from a private-sector lender covering 50 percent of the project cost. The second component is a 504-loan made by a CDC and secured with a junior lien (funded by a 100 percent SBA guaranteed debenture) covering up to 40 percent of the project cost. The final portion is a contribution from the borrower of at least 10 percent equity.