Professional Report - 1st Quarter 2012

Recent Changes: 504 Refinance Program

With the Small Business Jobs and Credit Act of 2010, it became possible to use the SBA 504 loan for refinancing. On October 12, 2011 the SBA released new changes to the program making it possible for more businesses to qualify for the SBA 504 Refi nance Program.

Proceeds from an SBA 504 refinance can now be used for: owner-occupied commercial real estate; machinery and equipment; itemized business expenses (such as salaries, rent, utilities, inventory, paying-down payables, and other business obligations); and closing costs associated with the project. The debt being financed must have been in place for two years prior to the application date, and it must have been current for the past year with no past-dues more than 30 days. The most recent update added that loan deferments and/or modifications are now eligible for refinancing as long as borrowers have not been past due on these newly-modified terms. It’s not possible to use the 504 to refinance loans with existing federal guaranties (includes 7(a), 504, and USDA loans), however.

"...here's some good news:
SBA lending is not only on
the rise, it's at an all time
high."

2012: The Year of SBA Lending Commercial real estate brokers who are familiar with the SBA 504 loan program can help their small business clients make smart decisions when it comes to commercial property financing, which will continue to be a hurdle until our economy gets a bit healthier. I have a strong feeling that SBA lending will continue to increase through 2012, and smart business owners (and commercial real estate brokers) will take full advantage of it.