SBA alters loan refinance terms - Business First of Buffalo:

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The changes were authorized in the American Recovery and Reinvestment Actof 2009. The 504 loan progran is administered through 271 Certified Development Companies across the On Wednesday, SBA began implementing the changez by publishing them as a permanentr rule in the Federal Register. The legislation allows 504 program projects to include a limitexd amount of debt refinancing if therse is a business expansion and the debt refinance d does not exceed 50 perceny of the projectedexpansion cost. The following are some conditionw under which borrowers will be eligiblefor • The debt beintg refinanced was incurred to acquirr land, to construct a building or to purchase equipment.
The assetsw acquired must be eligible for financing under the504 program. The existing debt is collateralized byfixedd assets. • The existing debt was incurred for the benefiy of thesmall business. • The new financinv provides a substantial benefit to the borrower whenprepaymenr penalties, financing fees, and other financing costs are taken into • The borrower has been current on all paymentxs of existing debt for one year prior to the date of refinancing.
“Lowerd interest rates mean lower payments and less monegy going out the door each month in debt That means more cash on hand to keep theirddoors open, their employees working and to even expanr and create more jobs,” said SBA Administrator Karehn Mills. The permanent changes allow small businesses to restructure eligible debt to help improvee their cashflow which, in turn, will enhancw their viability and support growth and job creation. The 504 loan program can be used to purchas e business real estate or fixed such as heavy equipmentor machinery, and expand curreny development projects.
Mills said the 504 program’z refinancing changes are the latest in several Recoveruy Act provisions implemented by the SBA inrecenft weeks. On March 16, the agencgy temporarily raised to 90 percentg the guarantee level on many ofits 7(a) programm loans and reduced fees on both 7(a) and 504 loans.If also doubled to $5 million the surety bond guaranteee level for small businesses competing for constructionh and service contracts. Additionally, on June 15, SBA’s American Recoveruy Capital loans became available for smalll businesses facing immediatefinancial hardship.