Financing assistance is provided to small businesses, which are defined as  "for-profit" businesses, with net assets of less than $8.5 million and after tax profits of less than $3 million per year, averaged over the last two years.

A typical project provides 90% financing to assist a small business acquire major fixed assets. This financing is provided with a bank loan covering 50 percent of the project costs and secured with a senior lien. A 504 loan from the REDC covers up to 40 percent of the remaining project costs, secured with a junior lien.

A contribution of at least 10 percent equity from the small business is required to complete the project costs. Project involving start up businesses and/or limit purpose assets, require a higher percentage of equity contribution.

The maximum 504 loan generally is $1,500,000 (up to $4.0 million for some manufacturing businesses). Assisted small businesses are required to create and/or retain one job for each $50,000 of SBA assistance received. This requirement may be be waived for National Policy Objective projects and the requirement for manufacturing projects may be one job per $100,000 of SBA assistance.

Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.

The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.