Which 504 projects qualify for the $5.5 million limit?
Short answer
Small manufacturers and eligible energy projects can reach $5,500,000 per project. A small manufacturer has a primary NAICS code in Sectors 31-33 and all production facilities in the United States. Source: SOP 50 10 8.1, Sec. C, Ch. 1, Para. D.1.
Two kinds of 504 project can reach $5,500,000 per project: small manufacturers and eligible energy projects (13 CFR § 120.931(c)).
Small manufacturers
The business needs a primary NAICSThe federal code system that sorts businesses by industry. code in Sectors 31, 32 or 33, with all production facilities in the United States. These projects also get:
- A looser job standard: one job per $95,000 guaranteed, or one per $150,000 for small manufacturers and energy public policy projects. Source: SOP 50 10 8.1, Sec. C, Ch. 1, Para. A.
- An FY2027 waiver of the upfront and annual SBA fees (SBA Information Notice 5000-881796).
Eligible energy projects
- A project that cuts existing energy use by at least 10%. New businesses cannot use this category.
- Renewable energy that generates more than 15% of the energy used at the project facility.
An independent third party must document compliance through an energy audit, engineering report or other professional evaluation (Para. A.2). The analysis uses actual energy usage, such as kilowatt hours, not dollars.
Sustainable design is a public policy goal, but it does not get the higher limit.
Aggregate cap
SBA Policy Notice 5000-879058 caps total eligible energy debentures at $16,500,000 for each small business and its affiliates. Those loans do not reduce the $5,000,000 limit for other projects. The matching sentence in the SOP omits the figure, so confirm it with your Certified Development Company (CDC).
Solar panels
Panels can count as land and building cost. Panels built mainly to sell electricity are treated as equipment. Leased panels that you will not own do not count (Para. C.1).
Sources
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