Certified Development Company Loans (504 Loans) (59.041)

Program

59.041 Certified Development Company Loans (504 Loans)

Federal Agency

Agency: Small Business Administration

Authorization

Small Business Investment Act of 1958, Title V, Section 504, Public Law 85-699.

Program Number

59.041

Last Known Status

Active

Objectives

To assist small business concerns by providing long-term, fixed-rate financing for fixed assets through the sale of debentures to private investors.

Types of Assistance

GUARANTEED/INSURED LOANS

Uses and Use Restrictions

Loans are to assist small businesses in the acquisition of land and buildings; the construction, expansion, renovation or modernization of buildings; or the acquisition and/or installation of machinery and equipment. Loans may have either a 10 or 20-year term.

Eligibility Requirements

Applicant Eligibility

Certified Development Companies (CDCs) package, close, and service these SBA-guaranteed loans to small businesses. A CDC must be incorporated under general State corporation statute, on a nonprofit basis, for the purpose of promoting economic growth in a particular area.

Beneficiary Eligibility

Small businesses must be independently owned and operated for profit. More specific criteria defining a small business are established by the Small Business Administration. Refer to 59.012 for general eligibility requirements. Size standards can be those of 59.012 or not-to-exceed $6 million net worth and $2 million net profit (averaged over 2 years).

Credentials/Documentation

To become a Certified Development Company (CDC), the applicant should include the following information: (1) Name and address of applicant; (2) type of CDC, State or local; (3) area of operation; (4) list of members or stockholders with address, occupation and telephone number; (5) list of officers and directors; (6) SBA Form 1081 on all officers, directors, and staff; (7) certified statement that no member or stockholder controls more than 10 percent of the voting control; (8) resume' on each officer and director; (9) the name of each individual who provides the CDC with the professional staff capability; (10) if contracted out, a copy of the contract is required to be submitted to SBA; (11) proof of compliance of representatives from the following groups; local government, private sector lending institution, community organization and business concern; (12) an organization chart and operating plan; (13) a flow chart on the CDC (evaluating, packaging, processing, closing and servicing functions); (14) address and description of the place of business, telephone number and financial statement; (15) the CDC's charter and certified by-laws; (16) articles certified by the State; and (17) a resolution of the Board of Directors certified by a corporate officer in which a company resolves to become a CDC, naming the person who is authorized to execute all documents. This program is excluded from coverage under OMB Circular No. A-87.

Application and Award Process

Preapplication Coordination

Preapplication coordination is required. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.

Application Procedure

This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. Loan applications must be made on SBA Form 1244 and requirements set forth thereon must be fully complied with by the Certified Development Company and the small business being assisted.

Award Procedure

CDC is notified in writing by the SBA Office. CDC notifies applicant.

Deadlines

Not Applicable.

Range of Approval/Disapproval Time

From 1 to 15 days. Within 10 working days after formal acceptance of application.

Appeals

Requests for reconsideration of a declined loan will be granted at any time within 6 months from the date of decline, providing that reasonable evidence is submitted to substantially overcome the stated reasons for decline.

Renewals

Renewals initiated by loan recipients.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula.

Matching requirements are not applicable to this program.

MOE requirements are not applicable to this program.

Length and Time Phasing of Assistance

Additional information available on SBA's website at sba.gov. See the following for information on how assistance is awarded/released: Additional information available on SBA's website at sba.gov.

Post Assistance Requirements

Reports

Audits

In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Small Business Administration has the right to conduct an audit of the books of the Certified Development Company and the small business concern at its discretion.

Records

During the term of the loan, both the Certified Development Company and the small business concern assisted must maintain financial records and information adequately reflecting all transactions and results of operations.

Program Accomplishments

Fiscal Year 2008: See the FY 2010 Performance and Accountability Report at SBA's website at sba.gov. Fiscal Year 2009: See the FY 2010 Performance and Accountability Report at SBA's website at sba.gov. Fiscal Year 2010: See the FY 2010 Performance and Accountability Report at SBA's website at sba.gov.

Financial Information

Account Identification

73-1154-0-1-376.

Obligations

(Salaries) FY 08 $25,106,000; FY 09 est $26,734,000; FY 10 est $29,090,000

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines and Literature

SBA Rules and Regulation, Section 120.800 and 120.900; Certified Development Company Program - Program Guide.

Related Programs

59.012 7(a) Loan Guarantees

Information Contacts

Regional or Local Office

See Regional Agency Offices. See Appendix IV of the Catalog for a listing of the Small Business Administration offices.

Headquarters Office

David Lippold 409 3rd. Street, SW, Suite 6000, Washington, District of Columbia 20416 Email: david.lippold@sba.gov Phone: 202-205-6569

Web Site Address

http://www.sba.gov.

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.