Small Businesses Adding Jobs With Help of SBA 504 Loans

Mclean, Virginia (PRESS RELEASE – September 17, 2010) – The U.S. Small Business Administration’s (SBA) 504 loan program  continues to provide long-term, fixed rate financing to America’s small businesses to purchase commercial real estate, expensive equipment and machinery. Luckily for many small business owners, the interest rates on SBA 504 loans have been falling for several months and the interest rates for both 20-year and 10-year SBA 504 loans fell in September to their lowest levels since the program’s inception.

Certified Development Companies, or CDCs, are the SBA’s conduit for providing 504 loans on Main Street, and they have been busy working with the small business borrowers taking advantage of the low interest rates. These special small business loans are being used by businesses for a variety of needs. Most businesses just need more space, some lost their leases and decided to invest in their own property, while others wanted to construct new green facilities incorporating energy efficient technologies. In addition to assisting small businesses with their financing requirements, all SBA 504 loan recipients are adding jobs in their communities.

Over 680 small businesses benefited from the very low interest rates in September. For example, Paragon Innovations, a company specializing in designing technologies for Fortune 500 companies was one of the lucky small businesses that received SBA 504 funding in September. Paragon Innovations, located in Richardson, Texas, was able to move out of leased space into an 18,600 square-foot building they purchased using an SBA 504 loan obtained through Greater Texas Capital Corporation. Not only were they able to lock in their occupancy costs and begin to build equity in their own building, but the additional space allows them to add nineteen new employees over the next two years.

In the small town of Townsend, Montana, PFM Manufacturing Inc., was able to purchase land and build a new manufacturing facility using an SBA 504 loan from Montana Community Finance Corporation. The company manufactures the LandTamer, an amphibious vehicle being built under contract for Lockheed Martin to provide supplies to our nation’s soldiers in remote areas. PFM Manufacturing anticipates creating ten new jobs within the next two years with their new manufacturing capability and increased space.

Another beneficiary of the low interest rate in September was a small business called Davis Art, a wholesale distributor of art work located in rural Greenville, Alabama. Last year Greenville’s unemployment rate peaked at over 15% and Davis Art was scheduled to close its doors.  But with the assistance of an SBA 504 loan from Southern Development Council, Inc., one of the company’s employees was able to purchase the business and the building, keeping the doors open and saving eleven jobs in the process.

Not only are the SBA 504 loan interest rates at an historical low right now, but coupled with a low down payment of typically only 10%, businesses are able to retain more working capital for operating expenses and inventory. According to Chris Crawford, President of NADCO, the trade association for the nation’s CDCs, “These incredibly attractive rates for long-term, fixed rate financing present a real opportunity for small business owners to realize their dreams of owning their own buildings or acquiring the expensive equipment or machinery they need right now.”

Small business owners should contact a Certified Development Company in their area if they would like to discuss a project or visit the NADCO website:

About the National Association of Development Companies (NADCO):

Created in 1981, the National Association of Development Companies is the trade association for America’s Certified Development Companies (CDCs). Certified by the U.S. Small Business Administration, CDCs are community-based economic development organizations that serve their local communities and states, and are dedicated to the promotion of small business expansion and job creation through SBA’s 504 Loan Program. In addition to the 504 program, many CDCs also provide small businesses with access to other Federal, state and local economic development loan programs. These programs provide both long and short term funding for borrowers.

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