How many jobs must a 504 project create or keep?
Short answer
A 504 project must create or retain one job per $95,000 guaranteed, or one per $150,000 for small manufacturers and energy public policy projects. A listed community or policy goal can substitute if the Certified Development Company (CDC)'s portfolio average holds (SOP 50 10 8.1, Sec. C, Ch. 1, Para. A).
A project must create or retain one job per $95,000 guaranteed, or one per $150,000 for small manufacturers and energy public policy projects. SBA measures against the amount it guarantees, so a $950,000 debenture at $95,000 per job needs 10 job opportunities. Source: SOP 50 10 8.1, Sec. C, Ch. 1, Para. A (p. 219).
What counts as a job
A Job Opportunity is a full-time or equivalent permanent job created within two years of receiving 504 funds. It also covers a job retained in the community because of the loan (13 CFR § 120.802).
Qualifying on another goal
A project can qualify under 13 CFR § 120.862 instead.
- Community development: stabilizing the local economy, stimulating other business development, bringing in new income, helping manufacturers, or serving labor surplus areas.
- Public policy: business district revitalization, exports, women-owned, veteran-owned or minority-owned business expansion, rural development, modernization, health or safety upgrades, and energy reduction.
The application must explain how the project meets the goal. The CDC's portfolio must still meet its job average.
The portfolio average
Para. A.2.b uses one job per $95,000, or $150,000 in Alaska, Hawaii, Opportunity Zones and other special areas. Para. A.1.b uses $150,000 for projects under § 120.862. Ask your CDC which average it is tracking.
If the numbers fall short
The debenture must be reduced to meet the requirement (Para. A).
The 7(a) chapters of SOP 50 10 8.1 set no comparable job test.
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