Frequently Asked Questions


If you have additional questions outside of the following, please contact us directly.


A Certified Development Company (CDC) finances business expansion through the purchase or equipment via the SBA 504 Loan Program. CDCs are certified by the SBA to offer the SBA 504 Loan Program. CCD's professional staff will work directly with you to tailor a financing package that meets program guidelines and the credit capacity of your business.

The United States Small Business Administration (SBA) enables growing businesses to secure long-term, fixed-rate financing for commercial industrial real estate and/or major machinery and equipment through the SBA 504 Loan Program. The program is designed to promote local economic development by helping healthy, growing businesses finance the acquisition of long-term fixed assets, including land, buildings, and major machinery and equipment. The 504 Program gives small business owners access to the same low-cost, fixed-rate, long-term financing that large businesses have through the bond markets.

Independently owned for-profit businesses are eligible if they have a net worth of $15 million or less with an average annual net profit after taxes of $5 million or less for the previous two years.

SBA 504 loans may be used for:

  • Land or Building Acquisition
  • Building Construction or Remodeling
  • Acquisition of Fixtures and Heavy Machinery

The qualifying business must become the primary occupant of the property financed. Proceeds cannot be used for working capital or costs unrelated to the project.

All costs that are directly attributable to the purchase or construction project can be financed, assuming the appraisal is high enough.

The SBA 504 Loan Program offers fixed-rate interest and terms of 10, 20, and 25-years on real estate and 10-year terms for equipment.

In most cases, the maximum loan amount for the SBA 504 portion is $5 million. However, manufacturing or companies that meet the public policy goal of reducing energy consumption can receive a maximum of $5.5 million for the SBA 504 loan portion.

The "typical" down payment for a SBA 504 project is 10% of the project cost from the Borrower. However, the SBA requires a larger down payment for start-up businesses (when Management has less than 2 years of ownership experience), or when the business is operating in a special-purpose type property (like a gas station, hotel or bowling alley).

Typical Borrower Additional, if Start-up Additional, if Special-Purpose Building

10% Injection 5% Injection 5% Injection

The subject property to be financed will be the collateral. CCD/SBA does not typically take personal residences as collateral. However, on a case-by-case basis, CCD/SBA may exercise the option to take additional collateral.

Yes, a real estate holding company can own the building. However, in this scenario, the operating company, the real estate holding entity, and all individuals with 20% or more interest must guarantee the loan.

The interest rate on the SBA 504 Loan is tied to the 5- or 10-year U.S. Treasury rate in effect on the date of funding and is fixed for the loan term. The rate cannot be locked in prior to funding.

SBA Fee is approximately 2.67% of SBA portion of loan. Bank fees are negotiated with the bank. All SBA fees and most bank fees are financed into the project.

No. The operating company must occupy at least 51% of an existing building or 60% of a new building. The Borrower must qualify for the loan without using income from the building tenants.

Yes. However, the prepayment penalty amount decreases each year and ends after 5 years on a 10-year loan and is gone after 10 years on a 20 or 25-year loan.

Yes. SBA 504 Loans are fully assumable. Note - Release of the original Borrower's personal guarantee is not automatic with the loan assumption.

Payments are due on the first business day of each month and are made by automatic debit. Late fees are due if payment is received after the 15th of the month.

SBA (Small Business Administration) The fee paid to SBA represents a guarantee fee required under the Code of Federal Regulations (CFR) to cover a loss reserve for the program.

CSA (Central Servicing Agent) The CSA is also known as Wells Fargo Bank, N.A. Corporate Trust Service. The CSA fee covers charges by Wells Fargo Bank, N.A. Corporate Trust Service to handle payment processing and loan accounting. They are appointed by the SBA to accept monthly payments, hold the monthly payments until the semi-annual debenture payment is due, pay the semi-annual debenture payments, and calculate and accept full payments on the SBA 504 Loan.

CDC (Certified Development Company) and for purposes of this website also known as CCD. The CDC is required to service the loan on behalf of the SBA by enforcing the terms of the loan documents. The CDC fee is set forth in the Code of Federal Regulations to pay for the servicing on SBA 504 Loans and cannot be waived.

The rate on the loan is determined approximately one week prior to the date the loan is funded. Your loan is pooled with all of the other SBA 504 Loans funded in the same month and is then sold in the form of debentures on the bond market. Debentures are priced based on current market conditions. Rates typically follow the trends of US Treasury rates, although rates on 504 debentures are higher.

Yes. CCD can work with any lender that utilizes the SBA 504 Loan Program.

No. SBA streamlined the program process, which now closely resembles your banks application requirements.

Yes, or even more than 2. The amount of your total SBA indebtedness is the limiting factor, not the number of SBA loans.