CDC Best Practices Guidance - Jobs Created and Retained Reporting

The primary goal of the 504 Loan Program is to encourage economic development by enabling small businesses to create or retain jobs within their communities. A CDC’s portfolio must maintain a minimum average of one Job Opportunity (full time or equivalent permanent or contracted job created within two years of receipt of 504 funds, or retained in the community because of a 504 loan) for every $65,000 of project debenture ($75,000 for borrowers located in Special Geographic Areas (Alaska, Hawaii, State-designated enterprise zones, empowerment zones, enterprise communities, and labor surplus areas) and $100,000 for Small Manufacturers). A CDC may choose to separate loans to borrowers located in Special Geographic Areas and must separate loans to Small Manufacturers from the remainder of its portfolio for the purpose of calculating the averages. While loans to borrowers meeting one of the 14 Community Development or Public Policy goals found in 13 CFR § 120.862 are not required to meet the Job Opportunity requirements, the CDC’s overall portfolio must still comply with the required Job Opportunity minimum averages.



SBA Form 1253 (Annual Report Guide) defines “Jobs Created” as full-time equivalent (8 productive hours per day/40 productive hours per week) permanent or contracted employment created within two years of financing. SBA Form 1253 defines “Jobs Retained” as jobs that otherwise would be lost to the community if the project was not done. A CDC must be able to reasonably show that such jobs would be lost, and cannot count all existing jobs as being retained if they were not at risk of being lost.

To allow SBA to monitor and manage this core objective of the 504 Loan Program, a CDC is required to verify, document and report on the actual number of jobs created and/or retained by its 504 loan borrowers as of each debenture’s two-year funding anniversary.



A CDC must have effective policies, procedures and internal controls in place to ensure that it requests and obtains required documentation from its borrowers verifying the actual number of full-time (or equivalent) permanent or contracted jobs that were created and/or retained by each borrower within two years of debenture funding and that the CDC accurately reports these job numbers to SBA in the CDC’s Annual Report. Tab 4 of SBA Form 1253 requires a CDC to collect this information in writing from a borrower on a document signed and dated by an authorized employee of the borrower.