The SBA 504 Loan program provides businesses with long-term, below-market fixed-rate, subordinated loans to purchase real estate, build, expand and renovate or make leasehold improvements to buildings, or purchase machinery and equipment.  The program requires only a small cash down-payment thereby preserving the business's working capital.  The purpose of the 504 loan program is to create or retain jobs in growing small or mid-sized firms.

CBFC provides 504 financing by issuing an SBA-guaranteed debenture for up to 40% of the total cost of the project.  A commercial lender selected by the borrower (or referred by CFBC) provides financing for at least 50% of the project.  The borrower provides the remaining 10% in the form of equity or subordinated debt.  For new businesses and some special purpose buildings, the minimum investment form the borrower increases to 15% or 20%.

The maximum amount of 504 financing which CBFC can provide is $1,500,000 (up to $2 million for exporters, minority or women or veteran owned businesses, and businesses in rural areas or targeted business districts and up to $4 million for small manufacturers) and the minimum is $100,000.  There are no restrictions on the total project size -- which may be up to $8-10 million.