504 Loans Offer Alternative Sources of Financing for Illinois Businesses

small business, business loan, business adviceNew relief is coming to small business owners in Illinois who are looking for inexpensive, high-quality financing from lenders they can trust. This year the Regional Development Company (“RDC”), a highly respected regional community development organization, will be extending its reach into Illinois.

What is the RDC?

The RDC is a federally certified business development company based out of Valparaiso, Indiana. Certified business development companies are non-profit community organizations that are certified by the federal Small Business Administration to provide and facilitate the receipt of 504 loans to deserving local businesses.

The RDC’s goal is to provide business loans, advice, and referrals to small business owners, accountants, attorneys, real-estate brokers, and banks. Essentially, the RDC uses its referral program and statewide business ties to provide strategic lending services, by connecting small business owners with lenders who have been certified by the RDC. Through the fostering of such relationships, the RDC is able to provide competitive lending rates and lower down payment rates. Furthermore, the RDC personally guarantees all 504 loans.

The 504 Loan Program

The 504 loan program is a federal Small Business Administration Program that provides long-term financing opportunities as a means to facilitate economic development. The RDC can directly grant 504 loans to local small businesses. The RDC plays an intricate role in the entire loan granting process, approval, closing, and servicing of 504 loans. People often wrongly believe that the program is only for small businesses that are ailing. In reality, the goal of 504 is to assist thriving, creditworthy small businesses to expand beyond their existing capacity, as a means to foster growth. These 504 loans can only be used for specific purposes, which include:

  • Land and building purchases;
  • Facility expansion;
  • Refinancing and consolidation of business debt;
  • Machinery and equipment purchases;
  • Inventory and goodwill purchases;
  • Franchising fees;
  • Working capital; and
  • Facility construction.

The RDCs Expansion Into Northeast Illinois

For over 20 years, the RDC has been providing 504 loans to Indiana businesses, and now they are expanding into Northeastern Illinois. This year the RDC will begin offering its services to businesses located in Cook, Will, Lake, DeKalb, Kane, Cook, McHenry, DuPage, Grundy, and Kendall counties.

The RDC sees its expansion into Illinois as a natural progression, given the interconnectedness of business between Illinois and Indiana. The RDC’s expansion into Illinois is a triumph for small business owners in Illinois, as the RDC has an exceptional track record and admirable dedication to providing financing to those local small businesses that deserve assistance the most.

 Contact the small business law attorneys here at the Gierach Law Firm in Naperville, Illinois for any questions that you may have regarding small business finance legal issues, or for any other questions that you may have.