North Texas Certified Development Corporation

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NORTH TEXAS CERTIFIED DEVELOPMENT CORPORATION SBA 504 BASICS PROJECT SIZE • $200,000 to $10,000,000 + BORROWER CONTRIBUTION / EQUITY INJECTION • A minimum of 10% unless ... • The operating company has been in business less than 2 years, then 15% or • If the project involves a limited or single purpose building, then 15% • At least 20% if both a new business and special purpose property SBA PORTION • $1.5 million typically, or ... • $2 million for projects achieving one of the Public Policy Goals • $4 million for manufacturing and certain "Green" projects • The 504 loan may not exceed 40% of the Total Project Cost • No more than 50% of the financing can come from Federal sources LOAN TERMS • 20 years for real estate Bank portion must be at least 10 years • 10 years for equipment Bank portion must be at least 7 years JOB CREATION • 1 new job must be created or retained for each $65,000 debenture or $100,000 for manufacturing, unless the project meets one of the Public Policy goals. PUBLIC POLICY GOALS • Business district revitalization or enhanced economic competition • Expansion of exports • Expansion of minority, woman, or veteran-owned enterprise (51% or more ownership) • Rural development BUSINESS SIZE STANDARDS (INCLUDING AFFILIATES) • Tangible net worth less than $8.5 million • Average net profit less than $3.0 million for the past 2 years LEASING / OWNER OCCUPANCY • 51% owner occupancy required if project involves purchase of an existing building • For new construction borrower must occupy 60% immediately, additional 20% within 3 years, and remaining 20% may be leased out long term ELIGIBLE BUSINESSES • For-profit corporations, partnerships, and proprietorshi ps • Owners must be U.S. citizens or legal permanent residents INELIGIBLE BUSINESSES • Passive income businesses (e.g. - apartments) • Financial institutions • Non-profit businesses ELIGIBLE LOAN PURPOSES • Purchase of land, building, machinery, or longterm equipment • Purchase land and construct new building & improvements • Purchase and Renovation of an existing building • Improvements or addition to existing building • Limited refinancing for expansion projects. INELIGIBLE PURPOSES • Working capital • Goodwill purchase • Inventory • Rolling stock such as cars, trucks, buses, or airplanes