What is the SBA 504 job creation requirement?

Job Opportunity, in the regulation

Section 120.861 is one sentence, and the important part is what it leaves out. A Project must create or retain one Job Opportunity per an amount of 504 loan funding that SBA specifies from time to time in a Federal Register notice, and that average stays in effect until a later notice changes it. The number is deliberately not in the CFR. This page does not state it, because anything not printed in the cited text and not read from the current notice would be a guess. Your CDC can tell you the current figure and show how it counts jobs.

The practical meaning is a ratio. A bigger 504 loan must be supported by more created or retained jobs. If the notice says one job per a given amount, a loan of twice that amount needs two jobs. The word "retain" matters: the rule recognizes that keeping a threatened job counts, which is why established businesses can qualify without hiring.

The alternative: community and public policy goals

Section 120.862 lets a Project qualify through goals instead. The Project must achieve at least one, the application must indicate how, and the CDC's overall portfolio of 504 loans, including this one, must meet or exceed the CDC's required Job Opportunity average. The test therefore moves from the single loan to the CDC's portfolio. Think of it as an average the CDC manages across all its loans.

The community development goals are improving, diversifying or stabilizing the local economy; stimulating other business development; bringing new income into the community; assisting manufacturing firms (NAICS sectors 31 to 33); and assisting businesses in Labor Surplus Areas as defined by the Department of Labor.

The public policy goals are a longer list of thirteen: revitalizing a business district under a written plan; expanding exports; expanding women-owned small businesses; expanding veteran-owned small businesses (especially service-disabled veterans); expanding minority enterprise development; aiding rural development; increasing productivity and competitiveness; modernizing facilities to meet health, safety and environmental requirements; assisting businesses in or moving to areas affected by Federal budget reductions; reducing unemployment in labor surplus areas; reducing energy consumption by at least 10 percent; increased use of sustainable design; and renewable energy plant, equipment and process upgrades. A few of these, as described on our maximum amount page, also affect the dollar cap.

The $90,000-per-employee cap on certain refinances

One place where a number is printed is the refinance without job objectives in 120.882(g)(15). Notwithstanding 120.860, a debt may be refinanced under paragraph (g) even if it does not meet the job creation or other objectives in 120.861 or 120.862, but then the 504 loan may not exceed the number of employees multiplied by $90,000. Employees are full-time employees on the application date plus part-time employees multiplied by their average weekly hours divided by 40.

The regulation's own example: 30 full-time employees and 35 part-time employees working 20 hours per week is 30 + (35 × 20/40) = 47.5 employees, so the largest 504 loan is 47.5 × $90,000 = $4,275,000. The calculator above reproduces that example. Another: 12 full-time and 10 part-time at 30 hours is 12 + 7.5 = 19.5 employees, or $1,755,000.

Reading the two routes together

The two routes are easier to see side by side. Route one is a loan-level test: the Project itself creates or retains the number of jobs that SBA's current ratio requires for the size of the 504 loan. Route two is a portfolio-level test: the Project serves a named goal, and the CDC's whole book of 504 loans averages out to its required Job Opportunity number. A Project that does neither can still be financed only in the narrow refinance case, where the employee-based dollar cap applies. This is why two businesses asking for the same loan size can be treated differently: one may rely on hiring and the other on a goal.

What to prepare

If your plan relies on job creation, document the baseline headcount and a hiring or retention plan before the application. If it relies on a goal, identify which numbered goal applies and how you will show it. Do not assume a goal automatically satisfies the rule: the CDC portfolio condition still applies. Section 120.860, referenced in (g)(15), is outside this page's scope.

For the eligibility side of the Project, see ineligible Projects.

Sources

• 13 CFR § 120.862, Other economic development objectives. Read November 2, 2026.
• 13 CFR § 120.861, Job creation or retention. Read November 2, 2026.
• 13 CFR § 120.882, Eligible Project costs for 504 loans. Read November 2, 2026.

Text read: Electronic Code of Federal Regulations, Title 13, Part 120, in the eCFR, current as of October 29, 2026. Dollar figures and percentages on this page are the ones printed in those sections as of that date; SBA can amend the rule and publishes loan-program procedures (such as SOP 50 10) that add detail this page does not cover. Confirm current terms with a Certified Development Company, an SBA-approved lender or at sba.gov. This page summarizes the regulation and does not replace it.