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Private commercial real estate lending practices
require small businesses to tie up much of their working capital
into fixed assets. Why should we care? Because it’s
working capital that allows businesses to take advantage of
market opportunities (create new jobs), or to adjust to adversities
(save existing jobs). Most small business failures are due
to lack of working capital. In 1980, these facts led the U.S.
Congress to create what is today known as the SBA 504 Loan
Program. Requiring just a 10% investment allows the preservation
of business working capital, which results in small enterprises
growing into larger ones and hiring more employees. This prosperity
improves the quality of life of the employer and employee,
as well as relieving welfare and unemployment rolls.
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