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 nearly $1.3 million — 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.”

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.