In order to qualify for the 504 program, your small business must meet the basic size 504 eligibility requirements of:

• For-Profit Business
• Business Net Worth not to exceed $15 million
• Average Net Profit for 2 consecutive years not to exceed $5.0 million
• Manufacturers must have 500 employees or less
• 51% owner occupancy for existing building purchase
• 60% owner occupancy for new construction
• Equipment must have a minimum 10 year economic life (if the project is equipment only)

Businesses fitting into any of the following categories are ineligible for the 504 program:

• Non-profit companies
• Real estate development or other speculative businesses
• Finance companies e.g. banks, check cashing or finance companies
• Pyramid sales distributions
• Businesses that limit membership for reasons other than capacity
• Businesses deriving more than 1/3 of gross annual revenues from legal gambling
• Religious based businesses
• Businesses or owners that have defaulted on a federal loan e.g. student loan
• Business of prurient sexual nature

504 loans may be used for:

• Land or building acquisition
• Building construction or remodeling
• Acquisition of fixtures and heavy machinery
• Transaction costs such as appraisal, title and escrow, and 504 fees included in the financing (provided they are supported by the appraised value of the project)

There are no maximums on the size of the project, only on the portion that can be funded by the 504 program. The limitations are:

• $5.0 million if the company has a majority owner and operator that is a veteran, minority, woman or if the business is located in a rural or other public policy goal area
• $5.5 million for businesses qualifying as small manufacturers & renewable energy

No. Prairieland EDC is a private not-for-profit company that is authorized by the SBA to deliver and administer the 504 program for projects in the state of Minnesota and parts of South Dakota and Iowa. Prairieland EDC was established in 1983 and is one of approximately 250 companies around the U.S. known as a Certified Development Company, or CDC.

The paperwork is comparable to that of any business loan. The Loan Officers at Prairieland EDC will work with you to help you in completing the requirements, the processing of the application and closing of the loan.

Prairieland EDC has worked with many banks throughout Minnesota, Iowa and South Dakota. The borrower can choose any bank or non-bank that is regulated by a state or federal regulatory body (such as a credit union or production credit association) to work in conjunction with Prairieland EDC to finance a 504 loan.

You can contact Prairieland EDC by calling 1-800-507-9003 or by sending an e-mail to info@prairielandedc.com.