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News Notices & Publications: Small business loans more affordable than ever at SEDA-COG


Small business loans more affordable than ever at SEDA-COG

Announcement Type


Date Published


Regional Spotlight


Short Description



Loans for small businesses will be more affordable than ever at SEDA-Council of Governments (SEDA-COG) due to an upcoming service fee reduction.


For U.S. Small Business Administration (SBA) 504 loans approved on or after Oct. 1, 2017, one of the annual service fees will drop from .697 percent to .642 percent (64.2 basis points) of the outstanding balance of the loan. For SBA 504 debt refinance loans, the service fee will decrease from .731 percent to .682 percent.


“One of the best public financing options for small businesses is SBA 504 loans that SEDA-COG provides statewide,” said Roxanne Greising, director of SEDA-COG’s Business Finance Department.


These loans can help businesses grow by financing the purchase of an existing building, new construction, a building renovation, land, and equipment.


The SBA 504 loans’ advantages are fixed rates and long terms with low down-payments. This preserves working capital, improves cash flow, and spreads the risk for all parties.


There are 20-year terms and amortization for real estate with no balloon payment. The SBA 504 program also finances equipment purchases with a 10-year term and amortization.


The low down-payments can be as minimal as 10 percent – compared to 20 to 25 percent, depending on the business.


The loans benefit both borrowers and banks because SBA 504 loans reduce the risk to both parties. It makes borrowers’ financing needs more attractive to lenders, and the bank’s loan-to-value is reduced to 50 percent, spreading the risk.


The SBA 504 loan advantages of fixed rates and long terms with low down-payments are made possible through SEDA-COG’s partnerships with banks.


The steps are as follows:


  1. Businesses work with their bank and SEDA-COG to create the financing package.
  2. After SEDA-COG approves the loan, it is submitted to the SBA for approval.
  3. The bank’s interim (bridge) financing covers the 504 loan to fund the project.
  4. Upon project completion, the 504 loan closes and pays off the bridge loan.


Eligible applicants include for-profit businesses that occupy a majority of their space with a net worth of less than $15 million and less than $5 million in profit after taxes.


With over 60 years of combined experience working with the SBA 504 loan program, SEDA-COG offers the experience and knowledge to help businesses start and grow. SEDA-COG believes in the future of Pennsylvania’s communities by investing in its businesses and partnering with lenders.


Contact SEDA-COG’s Business Finance Department to start a partnership today at 570-524-4491 or email

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Small Business Administration loans finance low rate


Created at 8/29/2017 1:33 PM by Liz Regan
Last modified at 8/29/2017 1:33 PM by Liz Regan