SBA helps expanding firms refinance - bizjournals:

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The SBA began allowing small businesses to use the 504 program to refinance existing debtJune 23, implementing a provisiobn in the economic stimulus legislation. This new program coulx be a big boost for small businesses carrying a heav debt load or facingy a balloon payment on a realestat loan, but there’s a The refinancing is available only to small businesses that also want to borroqw money to expand their businesses. Only 5 percen of small-business owners think now is a good time to according to a survey conducted in May bythe .
For thosde ready to take the leap, government-guarantees 504 loans are availabl from nonprofit organizations knownh as certified development which partner withcommerciao lenders. The program provides fixed-ratee financing to small businesses for fixed assets suchas buildings, land and Under the changes in the small businesses now can refinance existinbg debt related to fixed assets if they also borros money to finance more real estater or equipment.
The amount of debt being refinanced must be 50 percenf or less of the total cost of the The debt being refinanced also must be collateralizecd byfixed assets, and the terms and interest rate on the new loan must be betted than the existing loan. Borrowersw also must have been currentr on their existing loan for the past 12 SBA administrator Karen Mills said these permanent changew to the 504 program will help smal l businesses improve their cash flow by restructuring theirtcurrent debt, and finance new facilitiesa and equipment. “These are investments that are reallyt critical to business growtu andjob creation,” Mills said.
The credit crunch has made it difficultf for even strong companies to obtain financingfor expansion, she The 504 loan changes will help smal businesses take advantage of the good deals that are available in commercial real estate, said Chrisz Crawford, president and chief executive officer of the . “It’s going to enable a whole bunch of smalpl businesses that really do still want to expanf go after realestate that’s priced very, very said Crawford, whose association representzs certified development companies. Businesses that aren’f in a position to expande could be helped if Congress passes the Smal l Business Assistance in DebtAct (H.R. 2527).
This which recently was introducedby Rep. Betsg Markey, a Colorado Democrat, would allow all small businesse — not just expanding ones to refinance commercial real estates loans through the504 program. This would allow businesses to tap their equity intheir owner-occupied buildings, as well as get bettetr loan terms. Markey said it also would help banks reduce theirf risks on realestate “My bill will let small businessezs do what they do best: pull themselves up without a handouty or bailout,” Markey said.