Recovery Act Improves the SBA’s 504 Program



The SBA is excited to announce that we have improved our 504 loan program to help America’s small businesses lead the way to economic recovery.  The program is administered by approximately 270 Certified Development Companies (CDC) across the nation in partnership with a commercial lender and the SBA.
The 504 program provides small businesses with long-term, fixed-rate financing for major fixed assets that are critical to business growth and job creation.  Usually the maximum SBA loan debenture is $2 million, but certain manufacturing entities are eligible for a $4 million debenture. This means that a CDC can work with you to put together financing for a $10 million project with the bank providing a $5 million first mortgage with a SBA 504 debenture of $4 million, and only 10 percent equity.

For the first time ever, small businesses that are expanding will be able to refinance existing loans into an SBA 504 loan project for eligible fixed assets.
This debt restructuring will improve small business cash flows and strengthen their long-term outlook.  Any small business planning an expansion may refinance existing, eligible debt as long as the amount being refinanced is 50 percent or less of the total cost of the expansion.

Early this year, the SBA also expanded the 504 program to include projects that will conserve energy.  In addition all fees for the program have been waived for 2009.

Many small businesses owners in Pennsylvania have used the benefits of the 504 Loan Program including the following:

Grace Park, Stroudsburg, PA – George and Tammy Loudon used a 504 loan to open their senior living facility.  They provide assisted living and full-time care to seniors for short and long-term stays.

Iron Hill Brewery, West Chester, PA – This award winning micro brewery and restaurant used the 504 loan program to receive low fixed-rate financing to purchase the equipment.

The Mercersburg Inn, Mercersburg,  PA – James and Lisa McCoy left the corporate world, and used a 504 loan to purchase the inn.  They restored the property and now operate a high quality bed and breakfast located on 6.5 acres in historic Mercersburg.

Patagonia Bar & Grill, Richboro, PA – Daniel and Silvia Lucci used the 504 Loan Program to finance their new building.

Miller Supply, Northampton, PA –  Dale Miller successfully competes with the large home supply retailers by providing hands-on customer service.  His expanded  his business with an SBA 504 loan.

To learn more about the 504 program, call the SBA at 610-382-3077 or go to