SBA offering new program for commercial mortgages
Published: February 21,2011
WASHINGTON — Small businesses facing maturity of commercial mortgages or balloon payments before Dec. 31, 2012, may be able to refinance their mortgage debt with a 504 loan from the U.S. Small Business Administration under a new, temporary program.
The new refinancing loan is structured like SBA’s traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. A key feature of the new program is that it does not require an expansion of the business in order to qualify.
SBA will begin accepting refinancing applications Feb. 28. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012.
The SBA initially will open the program to businesses with immediate need due to impending balloon payments before Dec. 31, 2012. SBA will revisit the program later and may open it to businesses with balloon payments due after that date or those that can demonstrate strong need in other ways.
Borrowers will be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower, plus eligible refinancing costs. Loan proceeds may not be used for other business expenses. Existing 504 projects and government-guaranteed loans are not eligible to be refinanced.
Congress authorized SBA to approve up to $15 billion in loans under this program ($7.5 billion in both fiscal 2011 and 2012). Together with the first mortgage, this temporary program will provide up to $33.8 billion of total project financing. Additional fees charged to the borrower will cover the cost of this refinancing program and as a result no subsidy will be needed. The program is expected to benefit as many as 20,000 businesses.
To sign up for Mississippi Business Daily Updates, click here.
3 Responses to “SBA offering new program for commercial mortgages”
Twang & Tourism: The Country Music Trail
Still planning that summer vacation?
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- Silver Airways ordered to continue service
- Seafood R’evolution set to make Mississippi ‘the new culinary epicenter of the South’
- Bryant signs controversial abortion ban bill
- Soybean yield more than doubles in less than a decade
- Two Delta groups getting economic development funding
- Pharma Pac lays off rest of workers; could end up owing state
- Plans unveiled for large shooting range on Coast
- Ole Miss launches commitment to be 'climate neutral'
- Yarber could be sworn in today as new Jackson mayor
- Biloxi baseball project still alive but may be held for 2015