NADCO commissioned a study in 2007 to determine the economic impact of the SBA 504 loan program, and the results were very impressive.

“This study is the first formal assessment of the SBA 504 program’s economic impact at the national level,” said Chris Crawford, CEO and president of  NADCO. “In addition to significant business generation, we found a corresponding increase in federal, state, and local tax revenues that was many times greater than the funding required to administer the program.”

“Now that we have a more quantitative and systematic approach to documenting the economic impacts created by the SBA 504 Program, we can use this analytical framework to monitor program performance not only nationally but also at a regional level,” said Crawford. “We’ll be able to identify trends so that adjustments can be made in order to support both national and local economies."

The study, which was conducted by Applied Development Economics, Inc. and California State University, Chico, found that the 504 Loan Program very clearly provides a cost effective means by which to generate new business activity for the national economy.   In addition, the corresponding increase in tax revenues for the federal government is many times greater than the funding required to administer the program. In actual dollars invested, the financing provided to small businesses by the 504 loan program through Certified Development Companies represents a $94.00 return on each dollar loaned to small businesses.

The complete study is available at the following link:   SBA 504 Economic Impact Study

An Executive Summary of the study is also available that includes only the key highlights of the study:   SBA 504 Economic Impact Study Summary

A Local Economic Impact Model is available for CDCs to use and is included here as an excel spreadsheet.

A User Manual for the Local Economic Impact Model is available by clicking here.