SBA 504 Loan Refinance Program Provides Cash Infusion Opportunity

The low volume of 504 refinance loans being accessed by small businesses, spurred the SBA to look for reasons behind the limited use of this real estate refinancing option. As a result of input that was received following their inquiries, SBA has revamped or removed many of the restrictions that were hindering businesses from qualifying for these refinance loans.

The 504 refinance loan program provides long-term, fixed rate refinancing o real estate debt for small businesses. Current interest rates and fees are very low, making this a great deal for business owners. This is a temporary program, however, and will expire in September of 2012, so applications do need to be processed in the coming months.

One of the major changes in the regulations that can benefit business owners in a big way is the ability to refinance up to 90% of the appraised value of the real estate, rather than just the current balance on their real estate debt. This provides a great opportunity for business owners to utilize this refinance program for a much needed cash infusion into their business’s operation.

Previously, the third party lender involved in the financing was required to provide at least 50% of the financing. This has been changed also. The third party lender must now simply provide an amount equal to or greater than the amount provided by the SBA. Definitions regarding an applicant’s ‘current status’ on their payables have also been made a bit more lenient to allow more credit worthy businesses eligible for this funding.

To see all the details of this limited time program and how to apply, visit the SBA site at: http://www.sba.gov/content/504-loan-refinancing-program

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