Friday, 04 November 2016 13:43

SBA 504 Loan Program Renamed "SBA Grow Loan"

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SBA 504 Loan Program Renamed "SBA Grow Loan" Supplied photo

On November 1, the Small Business Administration issued a notice announcing the new name for the 504 loan program. The SBA 504 Loan Program name has been changed to the SBA Grow Loan Program. No significant changes have been made to the loan program other than the name.

OOC is authorized to finance projects using the SBA Grow Loan Program which is designed to promote economic development growth and job creation in small businesses. The program can make the overall financing structure for a new business or project more attractive and affordable.

The program offers accessible, fixed-rate, long-term financing for land, buildings and equipment. Businesses eligible for SBA Grow Loans are independently-owned, for-profit businesses that are ready to expand and create jobs. They must have a net worth less than $15 million and an average net income of less than $5 million for the two years prior to SBA Grow Loan application. A SBA Certified Development Company (CDC), such as Operation Oswego County, finances 40 percent of the project with a SBA Grow Loan, a bank lends 50 percent and the small business provides 10 percent equity.

Key Program Points

• For every $65,000 of a regular SBA Grow Loan, the project must create or retain at least one job.
• For every $100,000 of a manufacturing SBA Grow Loan, the project must create or retain at least one job.
• Machinery and equipment financed must have a useful life of at least 10 years.
• For construction of a new building, the small business borrower must plan to occupy at least 60 percent of the space.
• The borrower must qualify as a small business. According to the SBA, about 98 percent of all U.S. companies meet the agency's definition of a small business.
• The maximum size of a regular SBA Grow Loan is $5 million, while the maximum for a manufacturing Grow Loan project is $5.5 million. The interest rate is fixed for the entire 10 or 20 year term of the loan.

Notice — Important information about identification procedures when obtaining a SBA Grow Loan:

To help the U.S. government fight the funding of terrorism and money laundering activities, federal law requires all Cerfified Development Companies to obtain, verify and record information that identifies each person who applies for a SBA Grow Loan.

What this means for you: When you apply for a SBA Grow Loan, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your drivers license or other identifying documents.

Over the last several years, Operation Oswego County, as a SBA Certified Development Company (CDC), has issued SBA Grow Loans to support many projects including Harbor Lights Chemical Dependancy Service in Mexico, Bosco's Food Market in Oswego, River House Restaurant in Pulaski, DeWald Roofing in Hastings, Barnett Forest Products in Scriba, D&D Logging in Palermo, Oswego Sub Shop in Oswego and Bardy's 4 Seasons Tire & Auto in Sandy Creek.

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