Chris Hurn, founder and CEO of Mercantile Capital Corporation and a leader in the SBA 504 finance industry, testified on March 29 before the Senate Committee on Small Business and Entrepreneurship to recommend extension of the SBA 504 refinance program and the SBA 504 First Mortgage Loan Pooling Program (FMLP). Both programs, which provide very competitive commercial loans to business owners, are set to expire in fall 2012.
The SBA 504 refinance program allows business owners to use the SBA 504 program, traditionally allowed for construction and acquisition of businesses only, to refinance existing business loans to capture more favorable terms. Historically, only the less-competitive SBA 7(a) loan program provided for refinancing of business loans into an SBA program.
The FMLP program allows banks and finance companies that fund the conventional first-mortgage portion of an SBA 504 loan to sell a portion of the loan in the secondary market, earning fees and providing capacity to make additional loans.
While Chris was only provided about 7 minutes of speaking time, he submitted 12 pages of testimony. When asked about the outcome, Chris said, “It’s going to take a while (to move this agenda), but we may have moved the ball a bit today.”