SBA 504 loans are in fact a combination of two loans. One loan comes from a Certified Development Company (CDC), non-profit companies that are regulated by the SBA and certified to offer 504 loans. There are 177 active CDCs spread out across the U.S, with at least one in each state. The other loan comes from a third party lender, such as a bank. Along with a typical 10% down payment, the CDC loan usually comprises 40% of the project cost, while the third party lender loan usually comprises 50% of the project cost.
Fiscal Year 2024
178
CDCs
1341
Third Party Lenders
SBA 504 lenders play a critical role in the program by originating, underwriting, and servicing 504 loans. While the SBA provides a government guarantee that reduces the risk for lenders, it’s the lenders who make the credit decisions and fund the loans. This partnership between the SBA and approved lenders enables businesses that may not meet the requirements of traditional loans to access financing with favorable terms and conditions, such as longer repayment periods and lower down payments.
SBA 504 lenders differ in their current level of activity, expertise, preferences, and more, meaning that some will be better than others for a particular loan. This is where 504Savvy comes in. Our extensive experience and connections give us the peerless ability to connect you with the best lender for your particular loan. And not only do we connect you with the best lender, but also with the best person within each lender. This additional level of connection makes our lender-borrower matches uniquely effective.