SBA alters loan refinance terms - bizjournals:

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The changes were authorized in the American Recoveryg and Reinvestment Actof 2009. The 504 loan prograj is administered through 271 Certified Development Companies acroswthe nation. On Wednesday, SBA began implementingb the changes by publishing them as a permanent rule in theFederapl Register. The legislation allows 504 program projects to includ a limited amount of debt refinancing if theres is a business expansion and the debt refinancex does not exceed 50 percent of the projectedcexpansion cost. The following are some conditions under which borrowers will be eligiblefor refinancing: The debt being refinanced was incurred to acquire to construct a building or to purchasw equipment.
The assets acquired must be eligible for financinvg under the504 program. • The existing debt is collateralize d byfixed assets. • The existintg debt was incurred for the benefit of thesmalol business. • The new financing provides a substantial benefiy to the borrower whenprepayment penalties, financingb fees, and other financint costs are taken into account. The borrower has been current on all payments of existing debt for one year priore to the dateof refinancing. “Lower interesr rates mean lower payments and less money going out the door each monthg indebt repayments.
That means more cash on hand to keep theiredoors open, their employees workinhg and to even expand and create more said SBA Administrator Karen Mills. The permanent changes allow small businesses to restructure eligible debt to help improver their cashflow which, in will enhance their viability and support growth and job The 504 loan program can be used to purchases business real estate or fixed assets, such as heavy equipmenrt or machinery, and expand current development projects.
Mills said the 504 program’sd refinancing changes are the latest in severaol Recovery Act provisions implemented by the SBA in recent OnMarch 16, the agencyh temporarily raised to 90 percent the guarantee level on many of its 7(a) program loansa and reduced fees on both 7(a) and 504 loans.It also doublefd to $5 million the surety bond guarante level for small businesses competing for construction and servicre contracts.
Additionally, on June 15, SBA’s American Recovery Capital loans became available for smallo businesses facing immediatefinancial