The CDC is an Indiana Certified Development Company authorized by the US Small Business Administration (SBA) to administer the 504 loan program. We provide a solution to businesses with permanent financing needed to acquire, renovate or expand an owner occupied commercial facility or purchase fixed assets with a useful life of at least 10 years. The CDC works with the business owner and commercial lender to arrange financing that bridges the gap in the owner’s available equity. The 504 program’s primary focus is to create jobs within our communities. A private investment firm issues an US backed debenture in the capital markets to fund the 504 program, therefore, there is no cost to the taxpayer.
Fees include a 1% application fee up to $2500.00 of loan amount. This fee is refunded after the loan has funded or if your loan request is not approved by either the CDC Board of Directors or SBA.
A typical project would be structured as: a commercial lender providing 50% of the project total, the CDC providing 40% and the business contributing a minimum of 10%. The business equity injection requirement may be higher if it is a newly established business or if the project is considered single purpose. Examples of a single purpose facility would include a hotel, bowling alley or car wash.
$3,000,000 Project
Cost |
$2,000,000 $ 500,000 $ 300,000 $ 200,000 $3,000,000 |
XYZ Bank |
$ 1,500,000 |
CDC maximum allowable debenture is $1,500,000 unless the borrowing business is a small manufacturer or meets a federal public policy goal (ask us for details).
Eligibility Criteria:
- Legal entity - corporation, partnership, sole proprietor, limited liability company
- Located in the United States
- Net worth under $8.5 million and net profits under $3 million
- Participation by another lender who finances up to 50% of project costs
- Economic development goals must be achieved through the project financing
- Owner-user of the project being financed must occupy at least 51% of the property for an existing building or 60% of a newly constructed building. Two or more unrelated small businesses can receive a SBA 504 loan if they combine to meet occupancy requirements.
A Small Business is Not Eligible if it is:
- A not-for-profit (exception for sheltered workshops)
- Engaged in lending; a passive holder of real estate and/or personal property; a life insurance company – however an insurance agency is eligible)
- Located in a foreign country or owned by aliens who do not have legal permanent resident status
- Has restriction on patronage
- Is a government-owned entity (exception for Native American tribes)
- Engaged in promoting religion
- Consumer and marketing cooperatives (producer cooperatives are eligible)
- Engaged in loan packaging
- Owned by persons of poor character
- Equity interest by lender, CDC or associates in applicant concern
- Provides prurient sexual material
- Has previously defaulted on a federal loan
- Engaged in political or lobbying activities
- Speculative businesses
Community Development Corporation of Northeast Indiana
Citizens Square | 200 East Berry St., Suite # 320 | Fort Wayne IN 46802 | (260) 427-1127