13 CFR 120.801 - How a 504 Project is financed.

Status message

There are 4 Updates appearing in the Federal Register for 13 CFR Part 120. View below or at eCFR (GPOAccess)
§ 120.801 How a 504 Project is financed.

(a) One or more small businesses may apply for 504 financing through a CDC serving the area where the 504 Project is located. SBA issues an Authorization if it agrees to guarantee part of the funding for a Project.

(b) Usually, a Project requires interim financing from an interim lender (often the same lender that later provides a portion of the permanent financing).

(c) Generally, permanent financing of the Project consists of:

(1) A contribution by the small business in an amount of at least 10 percent of the Project costs;

(2) A loan made with the proceeds of a CDC Debenture for up to 40 percent of the Project costs and certain administrative costs, collateralized by a second lien on the Project Property; and

(3) A Third Party Loan comprising the balance of the financing, collateralized by a first lien on the Project property (see § 120.920).

(d) The Debenture is guaranteed 100 percent by SBA (with the full faith and credit of the United States), and sold to Underwriters who form Debenture Pools. Investors purchase interests in Debenture Pools and receive Certificates representing ownership of all or part of a Debenture Pool. SBA and CDCs use various agents to facilitate the sale and service of the Certificates and the orderly flow of funds among the parties.

[61 FR 3235, Jan. 31, 1996, as amended at 64 FR 2118, Jan. 13, 1999]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
Statutes at Large

Title 13 published on 2015-10-16

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 13 CFR Part 120 after this date.

  • 2016-08-09; vol. 81 # 153 - Tuesday, August 9, 2016
    1. 81 FR 52595 - Miscellaneous Amendments to Business Loan Programs and Surety Bond Guarantee Program
      GPO FDSys XML | Text
      Proposed rule.
      SBA must receive comments to the proposed rule on or before October 11, 2016.
      13 CFR Parts 115 and 120
The section you are viewing is cited by the following CFR sections.

Title 13 published on 2015-10-16.

The following are only the Rules published in the Federal Register after the published date of Title 13.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2016-06-27; vol. 81 # 123 - Monday, June 27, 2016
    1. 81 FR 41423 - Affiliation for Business Loan Programs and Surety Bond Guarantee Program
      GPO FDSys: XML | Text
      Final rule.
      This rule is effective July 27, 2016.
      13 CFR Parts 109, 115, 120, and 121