SBA eases eligibility requirements for 504 financing

By Andy Clausen, SPEDCO

SBA recently published a notification announcing they are changing the job creation and retention requirements for the 504 Loan Program by increasing the dollar amounts used in calculating the number of jobs that must be created or retained for each 504 Project and for the portfolio average of each Certified Development Company. In addition, SBA is designating additional areas for application of the higher portfolio average.

SBA is modifying the Job Opportunity requirements as follows:

  • A Project must create or retain one Job Opportunity per $75,000 (previously $65,000) guaranteed by SBA except that, in the case of a Project of a small manufacturer, the Project must create or retain one Job Opportunity per $120,000 (previously $100,000) guaranteed by SBA;


  • For Projects that are eligible under 13 CFR 120.862, “Other economic development objectives,” a CDC’s portfolio must reflect an average of one Job Opportunity for every $75,000 (previously $65,000) guaranteed by SBA.

For Projects in Alaska, Hawaii, State-designated enterprise zones, empowerment zones and enterprise communities, labor surplus areas (as determined by the Secretary of Labor), and for other areas designated by SBA, the CDC’s portfolio may average not more than $85,000 per job created or retained.  In addition, SBA is designating “Opportunity Zones” as additional areas for which this higher portfolio average would apply. Find Minnesota Opportunity Zones.

While SBA’s easing of eligibility requirements makes it easier for borrowers to qualify, community banks can look to a partner like SPEDCO to help their project line up with SBA’s economic development goals. We can often find a way to make the project work.

Contact Andy Clausen with questions at 651-631-4900 or email him


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Bloomington, MN 55425

Phone: 651.687.9080

Fax: 651.687.9387

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