Congresswoman Jackie Speier Announces SBA Mortgage Relief Program to Small Businesses
SAN MATEO, CA – February 21, 2011 – (RealEstateRama) — Congresswoman Jackie Speier (D-San Francisco/San Mateo) today announced that the Small Business Administration is offering a program that will help small businesses facing maturity of commercial loans or balloon payments refinance their mortgage debt.
“This is a lifeline to businesses at a time when our economy is starting to recover,” Speier said. “This program could keep business ownersout of foreclosure who are making their payments on time and are doing well.”
The temporary program will permit business owners to use a version of SBA’s 504 loan program to refinance mortgage loans that would mature before December 31, 2012. Applications will be accepted starting February 28, 2011 until September 27, 2012.
Congress authorized the SBA to approve $15 billion in loans under this program, $7.5 billion this year and $7.5 billion in 2012. SBA estimates that the program will benefit up to 20,000 businesses in the U.S., up to 5000 of them in California.
Traditional 504 loans are long-term financing tools designed to encourage economic development by offering small businesses fixed-rate financing to acquire major fixed assets for expansion and modernization. The business owner has to commit to at least 10% equity and work with a third-party lender and an SBA-approved Certified Development Company on a standard 50% /40% split. Under the temporary program, the business is not required to expand to qualify for a loan modification.
Business owners can refinance up to 90% of the current appraised property value or 100% of the outstanding mortgage, whichever is lower.
The SBA may later expand the program to businesses with balloon payments due after December 31, 2012
Find a Fact Sheet about 504 Loan Refinancing For Eligible Small Business Assets Under the Jobs Act here.
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Contact:
CA – Katrina Rill (650) 342-0300 / (650) 208-7441
Katrina.Rill (at) mail.house (dot) gov
