Healthy businesses, who plan to invest in equipment or real estate for their own use, could qualify for attractive financing using the SBA 504 Loan Program – in a way that can help you meet policy and regulatory guidelines.

The Certified Development Corporation of the Southwest (CDCSW) makes the process easy. Our professionals work with you and your client to tailor a financing package that meets program guidelines and the credit criteria of your client. We work directly with the applicant to package, process, close and service the 504 loan.

Many smaller banks value the role of CDCSW in enabling them to provide SBA products they might otherwise not be able to offer. When you have a borrower who may benefit from a 504 loan you can contact the CDC of the Southwest to assist in describing the 504 product to your customer. We will assist you and your borrower in the 504 application process.

Typically the lender and the CDCSW will perform simultaneous underwriting for the credit we each provide. It is common for the lender and the CDCSW to contact each other during the underwriting process to discuss any concerns that each of us may have with the project.

Once the participating lender has indicated an interest in financing the 50%, the CDCSW staff prepares a loan memorandum and presents it to our Board which meets on an as needed basis (no need to wait on monthly meetings). Once the Board approves the project, the CDC of the Southwest presents the application to the SBA to acquire its agreement to guarantee the CDCSW's bond. This generally takes a few days. We then issue a commitment and the participating lender closes its first mortgage loan and bridge loan. When the project is complete, the borrower closes with the CDCSW and the CDCSW wires its money to the bridge lender. To fund the 504 portion of the financing, CDC of the Southwest issues bonds guaranteed by the U.S. Small Business Administration and sold in the private bond market. The borrower then makes payments to the CDCSW for the SBA 504 loan. The CDCSW services the loan for its life.

Key 504 advantages for participating lenders:

  • You make your own credit decision and use your own loan documentation
  • There is no SBA paperwork for you to complete
  • You set your own rate and fees