Washington, DC – SBA Associate Administrator Jeanne A. Hulit announced the agency’s support for an extension of the 504 Debt Refinance program at a Senate Roundtable including Sen. Mary Landrieu (D-LA) and Sen. Jim Risch (R-ID), Chairman and Ranking Member of the Senate Small Business Committee Thursday.
Pointing to over 400 small business borrowers seeking to unlock over $500 million by refinancing old, expensive debt on the last day of the temporary program as it expired last year, Hulit said the benefits of the program are clear and the SBA fully supports reinstating it. “The demand is still there,” Hulit said.
Sen. Landrieu, noting the program’s zero cost to taxpayers, called on witness Ralph Hardt, a small manufacturer whose Wisconsin company unlocked $5 million through 504 debt refinancing provided by CDC Wisconsin Business Development, enabling the manufacturer to create jobs. “We will hire 101 people this year,” Hardt said. “The debt refi turned us around.” Hardt said the business was starved for cash during the Great Recession as it struggled not to impose layoffs during the downturn. When demand increased for auto parts, the company couldn’t access the capital it needed to respond to the market. “We had too much high-interest, short term debt – the banks wouldn’t give us more,” he said.

When the 504 Debt Refinance came through, banks increased the manufacturer’s credit lines and other financing. Sen. Landrieu said not extending debt-refi through legislation she has introduced as the CREED Act, would be irresponsible. “It’s their money,” she said, referring to the small businesses who have used Debt Refinancing to access cash for job creation and other needs.
Joe Wolfe, Chairman of the National Association of Development Companies (NADCO), leads Wisconsin Business Development. “We helped 143 businesses refinance their debt through this program,” he said. “It was a lifeline for many, and it could help a lot more.”
NADCO estimates that the five-year extension of the program envisioned in the CREED Act could enable 250,000 small businesses to access vital capital. According to a recent U.S. Census-George Mason University study, small businesses in the 504 program create 25 percent more jobs than non-504 borrowers.
In addition to Landrieu, Sen. Jeanne Shaheen (D-NH), Sen. Claire McCaskill (D-MO), and Sen. Johnny Isakson (R-GA) – widely considered the Senate’s expert on commercial real estate – are co-sponsors of the CREED Act.
“At this time in our economy, with unemployment still stuck at 7.7 percent, it is imperative that Congress enact measures like the CREED Act to help small businesses access the capital they need to create jobs,” said NADCO President & CEO Beth Solomon. “This is a no-brainer for both sides of the aisle.”

The Commercial Real Estate and Economic Development (CREED) Act, a zero-cost deft refinance program administered by the Small Business Administration, was originally enacted as part of the Small Business Jobs Act of 2010 but did not become fully operational until February 2012, significantly shortening the period of time that businesses could use 504 loans to refinance qualifying existing debt. It expired on September 27, 2012.
During that time, over 2700 businesses refinanced nearly $7 billion in old, expensive debt to unleash capital that was reinvested into their businesses to create and sustain jobs. The measure literally saved thousands of businesses in communities across the country during the recession, helping them accelerate the economic recovery.
Senator Mary L. Landrieu (D-La.), Chair of the Senate Committee on Small Business and Entrepreneurship, and Senator Jeanne Shaheen (D-N.H.), a senior member of the Committee introduced a five-year extension could offer capital access to over 250,000 additional businesses across the country, saving them up to $20,000 per month.
The 504 loan initiative is a long-term financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets for expansion or modernization. Certified Development Companies (CDC) work with the SBA and private sector lenders to provide financing to small businesses under the 504 loan program. A CDC is typically a private, nonprofit corporation set up to contribute to the economic development of its community.
The National Association of Development Companies (NADCO) is the trade association of Certified Development Companies (CDCs) – nonprofit companies that have been certified by the Small Business Administration (SBA) to

provide financing for small businesses under the SBA 504 Program. NADCO represents nearly 270 CDCs, serving all 50 states. In 2012, the industry provided $6 billion to nearly 10,000 U.S. small businesses.

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