USES AND USE RESTRICTIONS:
Loans are to assist small businesses in the acquisition of land and buildings;
the construction, expansion, renovation or modernization of buildings; or the
acquisition and/or installation of machinery and equipment. Loans may have
either a 10 or 20-year term.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Certified Development
Companies (CDCs) package, close, and service these SBA-guaranteed loans to
small businesses. A CDC must be incorporated under general State corporation
statute, on a nonprofit basis, for the purpose of promoting economic growth in
a particular area.
Beneficiary Eligibility: Small businesses must be
independently owned and operated for profit. More specific criteria defining a
small business are established by the Small Business Administration. Refer to
59.012 for general eligibility requirements. Size standards can be those of
59.012 or not-to-exceed $6 million net worth and $2 million net profit
(averaged over 2 years).
Credentials/Documentation: To become a Certified
Development Company (CDC), the applicant should include the following
information: (1) Name and address of applicant; (2) type of CDC, State or
local; (3) area of operation; (4) list of members or stockholders with
address, occupation and telephone number; (5) list of officers and directors;
(6) SBA Form 1081 on all officers, directors, and staff; (7) certified
statement that no member or stockholder controls more than 10 percent of the
voting control; (8) resume' on each officer and director; (9) the name of each
individual who provides the CDC with the professional staff capability; (10)
if contracted out, a copy of the contract is required to be submitted to SBA;
(11) proof of compliance of representatives from the following groups; local
government, private sector lending institution, community organization and
business concern; (12) an organization chart and operating plan; (13) a flow
chart on the CDC (evaluating, packaging, processing, closing and servicing
functions); (14) address and description of the place of business, telephone
number and financial statement; (15) the CDC's charter and certified by-laws;
(16) articles certified by the State; and (17) a resolution of the Board of
Directors certified by a corporate officer in which a company resolves to
become a CDC, naming the person who is authorized to execute all documents.
APPLICATION AND AWARD PROCESS:
Pre-application Coordination: Approval by a Certified
Development Company. This program is excluded from coverage under E.O. 12372.
Application Procedure: Application must be made
on SBA Form 1244 and requirements set forth thereon must be fully complied
with by the Certified Development Company and the small business being
assisted.
Award Procedure: Applicant is notified in writing
by the SBA Office.
Deadlines: None.
Range of Approval/Disapproval Time: Within 10
working days after formal acceptance of application.
Appeals: Requests for reconsideration of a
declined loan will be granted at any time within 6 months from the date of
decline, providing that reasonable evidence is submitted to substantially
overcome the stated reasons for decline.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Generally at
least 10 percent of the project cost must be injected by the small business
concern and 50 percent of the project cost must be provided by a private
lender.
Length and Time Phasing of Assistance: Not
applicable.
POST ASSISTANCE REQUIREMENTS:
Reports: Annual financial, management and operating
reports from the Certified Development Company.
Audits: Small Business Administration has the
right to conduct an audit of the books of the Certified Development Company
and the small business concern at its discretion.
Records: During the term of the loan, both the
Certified Development Company and the small business concern assisted must
maintain financial records and information adequately reflecting all
transactions and results of operations.
FINANCIAL INFORMATION:
Account Identification: 73-1154-0-1-376.
Obligations: (Guaranteed Loans) FY 01
$1,779,000,000; FY 02 est $3,000,000,000; and FY 03 est $3,500,000,000.
Range and Average of Financial Assistance:
No Data Available.
PROGRAM ACCOMPLISHMENTS:
During fiscal year 2001, 4,847 loans were approved through the 504 Development
Company Program for a total gross dollar amount of $1.77 billion.
REGULATIONS, GUIDELINES, AND LITERATURE:
SBA Rules and Regulation, Section 120.800 and 120.900; Certified Development
Company Program - Program Guide.
INFORMATION CONTACTS:
Regional or Local Office:
See Regional Agency Offices. Initial contact should be directed to the local District Offices (https://www.sba.gov/tools/local-assistance/districtoffices) listed in Appendix IV of the Catalog of Federal Domestic Assistance under Small Business Administration.
Headquarters Office:
Linda Reilly 409 3rd St., SW
8th Floor, Washington, District of Columbia 20416 Email: linda.reilly@sba.gov Phone: 202-205-9949
Web Site Address:
http://www.sba.gov/
EXAMPLES OF FUNDED PROJECTS:
Not applicable.
CRITERIA FOR SELECTING PROPOSALS:
Not applicable.
