If you’re a small business owner exploring financing options, you may be wondering what benefits a CDC lender can provide your company. CDC lenders, or Certified Development Companies, are nonprofit corporations that provide financing assistance to small businesses. Here are some of the key advantages CDC lenders offer.
Getting Low-Interest, Long-Term Loans
One of the best things about getting an SBA 504 loan from a CDC lender is that they offer low, fixed interest rates to small businesses. The interest rates are generally below market rates available from other commercial lenders. Plus, CDC lenders provide long-term loans up to 20 or 25 years, which can make repayment more affordable for you each month. The ability to lock in a low rate for an extended period can provide your business with stability and savings.
Retaining Equity and Saving Money
CDC lender programs like the SBA 504 require lower down payments than many other financing options. This allows you to retain more equity in your business while still getting the funding you need. For example, if you receive a $2 million SBA 504 loan, your down payment may only be around 10-20% of the total project cost. This is far less than the 20-30% or more required by conventional loans. Putting less down while getting favorable rates saves you money that you can reinvest back into operating and expanding your business.
Buying, Remodeling, or Expanding Space
In addition to great loan terms and equity benefits, CDC lenders specifically provide financing for major fixed-asset projects like purchasing land and buildings or making large-scale renovations. The long loan terms match the lifespan of real estate assets. So if you want to buy or renovate your commercial property to accommodate business growth, CDC lenders can help. The SBA 504 program can finance up to 90% of project costs to purchase existing buildings or construct entirely new facilities. This makes it easier for you to take that next step.
If you’re a small business looking for a loan, you aren’t alone. According to Fundera, last year, 43% of small businesses applied for a loan. Partnering with a CDC lender opens doors to smart financing and expert guidance. Connecting with a lender could be one of the best things you do for the longevity of your small business. They offer customized solutions combined with low rates and equity preservation, as well as helpful support. Reach out to us and let us help you get the loan you need to help your business grow and thrive.