NADCO: As Budget Advances, SBA 504 Program Back at Zero Subsidy
WASHINGTON, April 6, 2015 /PRNewswire-USNewswire/ -- The National Association of Development Companies (NADCO) has announced the 504 Loan Program will require no appropriation for fiscal year 2016, making it once again a self-sustaining program.
Starting on October 1, 2015, the Small Business Administration's national 504 Loan Program will be entirely self-funded with zero cost to taxpayers, as it had been for 16 years prior to the Great Recession.
"The SBA 504 loan program has been helping entrepreneurs fulfill the American dream for over 30 years," said Barbara A. Vohryzek, CEO and President of NADCO. "It was an integral economic development tool in reinvigorating the economy during the Great Recession, when banks were incapable of lending to small businesses. As a program that that can fill the credit market gap during an economic downturn, the SBA 504 is vital to small businesses that need capital during difficult economic times."
Due to the economic devastation associated with the Great Recession, particularly in the real estate market, the program required a subsidy from 2012-2015, but was still able to create 199,700 jobs from 2008 to 2010, during the worst recession since the 1930s when an estimated 9 million jobs were lost. Even more importantly, it saved thousands of small business owners from going under in a time when finding a new job was almost impossible.
"The program provides funding to credit-worthy small businesses that cannot utilize conventional loans due to the required high down payment," said Vohryzek. "504 loans, which are funded through SBA guaranteed debentures, provide the incentives needed for lenders to be our partners in the financing thereby allowing small businesses to expand. The loan is primarily for equipment, land, and commercial real estate, providing collateral to protect a lending partner as well as U.S. taxpayers. NADCO looks forward to this return to normal program funding and continuing the work of economic development and job creation across America."
About NADCO
The National Association of Development Companies (NADCO) is the trade association of SBA lenders including Certified Development Companies (CDCs), nonprofit companies that have been certified by the Small Business Administration (SBA) to provide financing for small businesses under the SBA 504 Program. NADCO represents nearly 240 CDCs, serving all 50 states. In 2014, the industry provided $4.26 billion to nearly 6,000 U.S. small businesses.
SOURCE National Association of Development Companies (NADCO)
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