SBA 504 Loans Provide Economic Stimulus

April 30th, 2008

SBA 504 Loans Provide Economic Stimulus

April 30, 2008 – With the current economic downtrend, the results of a recent study conducted by the National Association of Development Companies (NADCO) bear good news for the national economy. This first-ever study conducted on behalf of the trade association proved that the SBA 504 Loan Program generates new business activity and job growth on a national level and that the resulting increased tax revenues significantly exceed the program administration costs.

“As we have known for many years, small business is the engine of the American economy,” said Barbara Morrison, President and CEO of TMC Development, a leading provider of SBA 504 loans. “The findings of this study prove that the SBA 504 Loan Program greatly stimulates the economy through increased profits and job growth in the majority of participating businesses.”

The results focused on the program’s high return on investment due to the federal, state, and local taxes generated by business revenue and employment expansion. The SBA 504 Loan Program assists small businesses by providing long-term, low cost, fixed rate financing which can be used for the purchase, renovation or construction of owner-user commercial real estate or equipment. With these advantageous terms, plus a typical down payment of just 10%, the program allows many businesses to expand who otherwise might not be able to. Additionally, it is a zero subsidy program meaning that no tax dollars are used as funding.

Read more about the study here.