Ron Goldstein, director of Lender Relations for the N.Y. district office of the SBA, recently reminded New York SBA lenders that time is running out on the 504 Certified Development Company Loan Program for debt refinancing authorized by the Small Business Jobs Act of 2010. The program is set to expire on September 27, 2012.
According to Jimmy Hughes, Director of SBA 504 Program for the Regional Business Assistance Center, a New Jersey CDC, the 504 project must have received an Authorization (basically the SBA’s form of Commitment), but does not have to close by September 27, 2012. This provides a little extra time to close loans through the fall.
“But there may be a crush of applications right before the expiration that could overwhelm the SBA approval staff in Sacramento,” warned Jim Brett, a senior loan underwriter at ValueXpress. “This happened when the fee waiver and 90% guarantee amount expired for the SBA 7(a) loan program in December 2010, and although the surge may not be as great, borrowers who wait too long to apply for an SBA 504 refinance loan may get shut out.”
The SBA 504 refinance program enables a small business to refinance existing debt and, more important, use excess equity to obtain working capital that can be used for financing eligible business expenses. Borrowers will be able to refinance up to 90% of the current appraised property value.