504 Loans
A program that uses Community Development Corporations (CDCs are non-profit organizations that support local economic development) to provide long-term fixed-rate loans for major fixed assets such as land, buildings, machinery, or equipment; program loans cannot be used for working capital, inventory, repayment of other debts, or refinancing; commercial lenders provide up to SO% of the financing package secured by a senior lien; the CDC’s loan of up to 40% is secured by a secondary position or junior lien; the SBA backs the CDC with a guaranteed debenture and the small business must contribute at least 10% as equity or a down payment. (Davis, 2025)