There are many obstacles for potential business owners when they are trying to get their business started. Finding financing is probably high on the list of stressors. When investigating finance options, you’ll see many different types of loans and lenders. Understanding how these different options work will be crucial to your long-term success. Certified development companies are one route that small business owners might want to use. Let’s learn more about this financing option from a certified development company loan.
What Are Certified Development Companies?
A certified development company or a CDC as they are sometimes referred to, is a lender that exists outside of the Small Business Administration. These are non-profit organizations that operate independently. There are currently 230 CDCs in the United States. Each one has a different focus, but all of them work in conjunction with conventional finance institutions to get funding to businesses that otherwise could not obtain it.
Do CDCs Help the Community?
CDCs are often tightly entwined with the local economy of a community. These institutions work alongside the SBA to make sure local businesses get the financial backing they need. This can, over time, strengthen local businesses. These organizations are often used in efforts to revitalize neighborhoods and foster long-term community growth.
Should I Use a CDC?
A CDC can play an important role in the 504 loan process. They can offer these loans to companies that meet eligibility requirements. The CDC will be responsible for operating, being audited, and managing the funds generated by the SBA 504 longs.
There are many benefits to working with a CDC. These benefits include establishing relationships with local lenders and contributing to the local economy. These organizations are also efficient and responsive to the businesses they serve. They offer experience and expertise for business owners who are just starting out. They can also provide specific help for veterans who want to start businesses.
The biggest advantage is that the CDC will help small businesses access the capital they need to get their company off the ground. According to Fundera, 57% of small business loan applicants seek $100,000 or less. Most businesses need this jumpstart from an experienced lender.
These are just a few facts on CDCs and how they can help small businesses with a certified development company loan. If you’d like to learn more about these organizations, please contact us today. We look forward to working with you.