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About Us
The Northwest Piedmont Development Corporation has been a Certified Development Corporation (CDC) since 1984 and administers the U.S. Small Business Admininstration (SBA) 503/504 program in the northwest piedmont region of North Carolina.
The purpose of the Small Business Administration 504 program is to create employment opportunities by providing financing to help small businesses acquire or construct fixed assets (land, buildings, and long-life machinery). If the required number of jobs are not created, a project must meet a public policy goal (such as veteran, minority, woman-owned, or rural business development).
Typically, the participating lender provides the construction or interim financing. When the project is completed, the 504 loan is funded and used to pay the bank's interim loan down to a permanent first mortgage loan that is usually equal to 50% of eligible project costs. The 504 loan is for 30% to 40% of the project costs and is secured by a second lien. The project equity requirement is based on how long the operating company has been in business and whether the project facility is considered multi-purpose or special use.
An important consideration is that most of the related soft costs can be included in the 504 project budget, which is generally not the case with conventional financing. Examples of soft costs that can be included are professional fees (such as appraisals, architect's fees, engineering reports, environmental assessments, and so on), a contingency reserve for construction cost overruns, and interim loan interest to help cover the carrying costs until the facility is up and running. Other 504 loan benefits include low fixed-rate financing and a fully amortizing twenty-year loan term on real estate projects.
Download Information on SBA 504 Loan Program
Download SBA 504 Loan Program Brochure
Download generic 504 Project Summary
Updated: 07/12/2007 |
