Research has shown that a large percentage of commercial mortgages will mature within the next few years. Because real estate values have declined, small businesses that are performing well and making timely payments are having a difficult time refinancing these loans and might need to restructure their debt.
The SBA has implemented a temporary program that will allow small businesses to refinance eligible fixed assets in the 504 program without requirement of an expansion. Small businesses will be given the opportunity to lock in long-term, stable financing in addition to protecting jobs. SBA 504 refi loan will be packaged like a traditional 504 loan, and a bank or third party lender will provide at least half of the amount, while the CDC will provide 40%. The borrower will provide a minimum of 10% equity.
According to SBA, as many as 20,000 small businesses will be able to take advantage of this program. To learn more about SBA 504, visit sba.gov.
*Information provided by sba.gov
