How does Southern Development Council make loans?

We are certified by the U.S. Small Business Administration (SBA) to offer the “SBA 504 Loan Program”. Benefits of this program include low down payment (allowing the business to preserve working capital), longer terms, fixed interest rates, and larger loan amounts than may be available through a conventional loan. In many cases, the borrower’s down payment may be as low as 10% of project costs. We provide up to 40% of the funding for the project, and a participating lender provides 50%.

How can my 504 funds be used?

Land or building acquisition;
Building construction or remodeling, including usual “soft costs” such as appraisals, survey, environmental study, engineering fees, architect fees;
Acquisition of fixtures and heavy machinery;
Up to 1/3 of a project can be for eligible fixed asset debt refinancing where part of an expansion;
The qualifying business must become the primary occupant of the property financed. Proceeds cannot be used for working capital or costs unrelated to the project.

How much can I borrow?

Project sizes typically range from $200,000 to $18,000,000 (our largest to date) with the 504 loan size ranging from $80,000 to $5,000,000 (SBA portion up to $5,500,000 for manufacturers and $5,500,000 for projects achieving certain energy goals). The first mortgage loan can exceed 50% of the project total, which enables larger projects to take advantage of the benefits of the 504.

What fees are involved?

• 1.5% of SBA’s loan amount, financed as part of the loan.
• Bank Fees: Negotiated with bank.
• Up to $5,000 of closing cost and expenses can be financed as part of the SBA loan.

Can my equity injection (down payment) be borrowed?

While it is best if you put at least 10% of your own funds into the project, the down payment can be borrowed. However, borrowers must show that there is sufficient income to repay the “down payment” loan.

Is there a lot of paper work?

The paper work is comparable to that of any business loan. We have made efforts to streamline the process wherever possible. Applications can be made online at the following secure website:

What is the Turnaround Time?

Once we have received a completed application, your SBA loan can be approved in a matter of days.
The earlier you talk to us as you plan your project the easier and quicker the process can move.