504 Certified Development Loans

To assist small business concerns by providing long-term, fixed-rate financing for fixed assets through the sale of debentures to private investors.

Agency - Small Business Administration

The Small Business Administration maintains and strengthens the nation's economy by aiding, counseling, assisting and protecting the interests of small businesses and by helping families and businesses recover from national disasters.

Office - See Appendix IV of the Catalog for a listing of the Small Business Administration offices.
Website Address


Program Accomplishments

During fiscal year 2007, 10,668 loans were approved through the 504 Development Company Program for a total gross amount of $6.31 billion.

Uses and Use Restrictions

Loans are to assist small businesses in the acquisition of land and buildings; the construction, expansion, renovation or modernization of buildings; or the acquisition and/or installation of machinery and equipment.

Loans may have either a 10 or 20-year term.

Eligibility Requirements

Applicant Eligibility

Certified Development Companies (CDCs) package, close, and service these SBA-guaranteed loans to small businesses.

A CDC must be incorporated under general State corporation statute, on a nonprofit basis, for the purpose of promoting economic growth in a particular area.

Beneficiary Eligibility

Small businesses must be independently owned and operated for profit. More specific criteria defining a small business are established by the Small Business Administration. Refer to 59.012 for general eligibility requirements. Size standards can be those of 59.012 or not-to-exceed $6 million net worth and $2 million net profit (averaged over 2 years).


To become a Certified Development Company (CDC), the applicant should include the following information: (1) Name and address of applicant; (2) type of CDC, State or local; (3) area of operation; (4) list of members or stockholders with address, occupation and telephone number; (5) list of officers and directors; (6) SBA Form 1081 on all officers, directors, and staff; (7) certified statement that no member or stockholder controls more than 10 percent of the voting control; (8) resume' on each officer and director; (9) the name of each individual who provides the CDC with the professional staff capability; (10) if contracted out, a copy of the contract is required to be submitted to SBA; (11) proof of compliance of representatives from the following groups; local government, private sector lending institution, community organization and business concern; (12) an organization chart and operating plan; (13) a flow chart on the CDC (evaluating, packaging, processing, closing and servicing functions); (14) address and description of the place of business, telephone number and financial statement; (15) the CDC's charter and certified by-laws; (16) articles certified by the State; and (17) a resolution of the Board of Directors certified by a corporate officer in which a company resolves to become a CDC, naming the person who is authorized to execute all documents.

Aplication and Award Process

Preapplication Coordination

Approval by a Certified Development Company.

This program is excluded from coverage under E.O.


Application Procedures

Loan applications must be made on SBA Form 1244 and requirements set forth thereon must be fully complied with by the Certified Development Company and the small business being assisted.

Award Procedures

CDC is notified in writing by the SBA Office. CDC notifies applicant.




Small Business Investment Act of 1958, as amended, Title V, Section 504 and 505, Public Law 85-699, 15 U.S.C. 696; Public Law 100-590.

Range of Approval/Disapproval Time

Within 10 working days after formal acceptance of application.


Requests for reconsideration of a declined loan will be granted at any time within 6 months from the date of decline, providing that reasonable evidence is submitted to substantially overcome the stated reasons for decline.



Assistance Considerations

Formula and Matching Requirements

Generally at least 10 percent of the project cost must be injected by the small business concern and 50 percent of the project cost must be provided by a private lender.

Length and Time Phasing of Assistance


Post Assistance Requirements


Annual financial, management and operating reports from the Certified Development Company.


Small Business Administration has the right to conduct an audit of the books of the Certified Development Company and the small business concern at its discretion.


During the term of the loan, both the Certified Development Company and the small business concern assisted must maintain financial records and information adequately reflecting all transactions and results of operations.

Financial Information

Account Identification



Guarantees: FY 07 $6,282,000,000; FY 08 $7,500,000,000; FY 09 $7,500,000,000. Administration: FY 07 $16,028,000; FY 08 $16,521,000 and FY 09 $18,041,000.

Range and Average of Financial Assistance

Up to $1,000,000. FY 2007 average loan size was $591,785. Up to $1.5 million reg. 504; 2) 504 meets public policy $2.0 million; 3) small manufacturers $4.0 million.

Regulations, Guidelines, and Literature

SBA Rules and Regulation, Section 120.800 and 120.900; Certified Development Company Program - Program Guide.

Information Contacts

Regional or Local Office

See Appendix IV of the Catalog for a listing of the Small Business Administration offices.

Headquarters Office

Director, Office of Financial Assistance, Small Business Administration, 409 3rd Street S.W., Washington, DC 20416. Telephone: (202) 205-7562.

Criteria for Selecting Proposals


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Edited by: Michael Saunders

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