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 non–profit 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. Typically, a 504 project includes a loan secured with a first 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 covering up to 40 percent of the cost and a contribution of at least 10 percent equity from the small business being helped.
The Certified Development Company (CDC)/504 Loan program is a long–term financing tool for economic development within a community.