The SBA 504 is an economic development tool for small businesses, which create the most jobs but are excluded from access to capital markets.

Economic development financing provides funds for expanding businesses that are providing benefits to themselves and their communities, such as job creation, expansion of the tax base and expansion of personal income.

• Stimulates private sector investment in long-term fixed assets
• Increases productivity
• Creates new jobs
• Increases and/or stimulate local tax base

• Create economic development opportunity in a community
• Provide affordable long-term financing for business expansion
• Give a financial incentive to stimulate business capital investment
• Provide access to public capital markets for small business

• Low down payment which preserves working capital
• Fixed interest rate second mortgage loan
• Long Term Financing
• Rate of private sector financing usually more accessible partnering w/a 504 loan (Low LTV)
• In credit crunch-getting a loan at all
• Collateral usually limited to assets being financed

• Excellent LTV
• US. Government as Subordinate Lender
• No restrictions on rates as their loan is NOT guaranteed by the SBA
• Less paperwork and "red tape" than a 7a loan
• 504 first mortgage secondary market
• May participate in projects that would normally exceed lending limit

• Jobs
• Capital Investment; Tax Base Increase
• Stimulation of Other Development
• Greater Access to Capital for "underserved" markets