504 Loan Program Assists Nation’s Small Businesses with Record $1.28 Billion Funding in September

Certified Development Companies (CDCs) provided almost $1.3 billion in financing in September to assist small businesses in communities across the country, as they continue with economic recovery and growth

As published in a recent post by the National Association of Development Companies (NADCO), On Wednesday, September 16, the Small Business Administration (SBA) 504 Loan Program completed its largest monthly funding of loans in the program’s 34-year history, including 1,462 loans for $1,284,274,000 – more than double the previous record set in September 2012.  Historic levels of 504 loan closings and fundings were driven by record low interest rates and debt relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  Additionally, small businesses continue to benefit from SBA’s April 2018 introduction of a 25-year maturity option for 504 loans which complemented the program’s 10- and 20-year terms.  The 25-year term provides an affordable, fixed-rate option with an attractive term that increases the 504 loan program’s usefulness by lowering monthly payments and improving borrower cash flow – particularly critical, as small businesses continue economic recovery from the COVID crisis.

Recognizing this consequential achievement, NADCO President and CEO Rhonda Pointon highlighted the team effort of NADCO member CDCs, their lending partners, and SBA colleagues, commenting “America’s small business are vital engines of job opportunities and economic development in local communities across the country. The historic funding in September continues to validate the need and importance for community-based, mission lenders like our CDCs and for important tools like our 504 loan program in providing much needed access to capital to small businesses.  Our member CDCs continue to work daily to assist small businesses and entrepreneurs as they continue on the road to economic recovery and growth.”

About the SBA 504 Loan Program and Certified Development Companies (CDCs)

The 504 Loan Program is an SBA business loan program authorized under the Small Business Investment Act of 1958.  The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment, to facilitate the creation or retention of jobs and to support local economic development.  504 loans offer fixed rates for 10, 20, and 25 years and finance project costs of approximately $100,000 to $25,000,000.  Under the 504 Loan Program, loans are made in conjunction with private sector lenders to small businesses by Certified Development Companies (CDCs), which are certified and regulated by the SBA to promote economic development within their community.

Certified Development Companies are mission-based non-profit lenders operating in local communities throughout the United States and its territories.  As community financial institutions, CDCs offer a variety of loan programs and services to small businesses, including – SBA loans (504, Microloans, Community Advantage loans); U.S. Department of Housing and Urban Development Programs (Community Development Block Grants); U.S. Department of Agriculture loans (Rural Microentrepreneur Assistance Program, Intermediary Relending Program); U.S. Department of Commerce Economic Development Programs (revolving loan program); local and state loan programs; Community Development Financial Institution (CDFI) programs (including New Markets Tax Credit programs); Disaster relief; Direct Loan Funds; U.S. Department of Treasury Small Business Lending Fund programs; and management and technical services.  For more information, please refer to the “CDC Industry Access Study”, 2020 edition, published by NADCO.

About the National Association of Development Companies (NADCO)

NADCO is the national industry association representing over 200 certified development companies serving local communities throughout the United States and its territories.  In fiscal year 2019, CDCs approved 6,099 SBA 504 loans totaling almost $5 billion supporting 53,347 jobs across the United States.

About TMC Financing

Founded in 1981, TMC Financing is the nation’s No. 1 provider of SBA 504 financing, which allows small-business owners to finance or  refinancecommercial real estate and other fixed assets with long-term, below-market, fixed interest rates. SBA 504 loans can be used to finance the total project cost, which can include the purchase price, construction/renovations, equipment, soft costs and closing costs. 

TMC Financing has secured financing for projects worth more than $10 billion across California and Nevada. More than 6,000 businesses have benefited from this financing, resulting in the creation of an estimated 60,000 jobs. 

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