For the CDC/504 loan, the SBA approves and guarantees the development company's portion of the debt but does not guarantee the debt of the participating commercial bank.

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The CDC/504 loan program involves a partnership between a development company and a participating commercial bank. The SBA approves and guarantees the development company's portion of the debt (up to 40% of the total project cost), but does not guarantee the debt of the participating bank (which provides 50% of the financing). The remaining 10% of the financing typically comes from the borrower's own equity.

For the CDC/504 Loan, the SBA Approves and Guarantees the Development