155 S Main St – #403

Providence, RI 02903


Fax: 401-454-4890

SBA 504 Program

504 Program Impact: Rhode Island

Purpose of the Program

The US Small Business Administration 504 Program is designed to provide financing for the purchase of fixed assets at a fixed rate throughout the entire life of the loan. Operating as a Certified Development Company (CDC), Ocean State Business Development is a nonprofit corporation established to contribute to the economic development of local communities in Rhode Island, Massachusetts, and Connecticut.

Why it is Beneficial

  • Long-term fixed rate financing at below market rates.
  • Customer can obtain up to 90% financing
  • Borrower receives an expedited closing and low legal fees

The 504 programs gives the borrower the advantage of having a fixed rate for the entire life of the loan (10/20 years). This is important because it hedges the borrower from any interest rate risk associated with a conventional bank loan.

Interest rate risk is inherent from the interest rate environment that we live in today, and can provide a fair amount of uncertainty for small business owners. This is the case with adjustable rate and ballooning loans. The 504 program gives business owners peace of mind, so that they can plan their future cash flows!

Our Process

Our team will guide you through the process from application to closing. We here at OSBDA pride ourselves in customer service and emphasize communication with Banks, and most importantly our Borrowers. We understand that a business owner’s most important commodity is their time. Our lenders will work with you to ensure satisfaction throughout the entire process.

Typical financing structure on a $1,000,000 project:

% of Project Collateral
Lender $500,000 50% First Position
OSBDA/ SBA $400,000 40% Second Position
Borrower $100,000 10%*

Minimum equity requirements*:

Standard 10%*
Business is less than 2 years old 15%
If Real estate is considered “special use” 15%
If both startup and special use 20%


Required of all those who own 20% or more of the operating company/ real estate entity

Term of Fixed Financing:

20 years: Real estate
10 years: Equipment (that has a useful life of > 10 years)