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Dec. 21, 2011
For immediate release
For more information, contact:
Maria Kardon or Bonnie J. Prigge, (573) 265-2993
SBA 504 refinancing loan program updated for small businesses
The U.S. Small Business Administration (SBA) recently modified its 504 loan program to allow more small businesses to refinance existing real estate debt, said Maria Kardon, business loan specialist with Meramec Regional Planning Commission (MRPC). Locally, SBA 504 loans are offered through the Meramec Regional Development Corporation (MRDC), a non-profit Certified Development Company with staffing through MRPC.
The program revamp occurred in October 2011 with changes to regulations regarding loan qualifications. Small businesses can take advantage of long-term, fixed-rate loans to refinance maturing real estate debt. The program allows small businesses to refinance their existing debt and a limited amount of business expenses, including working capital, inventory and payroll.
“Eligible businesses must demonstrate their existing loans are current and close to maturity to be eligible for refinance,” said Kardon. “Previously, a business had to expand to refinance, and during these economic conditions, most businesses just wanted to reduce their expenses – not add more debt.”
The temporary program’s loan refinancing projects are structured the same way as traditional 504 loans. The program is set to expire Sept. 27, 2012.
Under the new refinancing feature, at least 50 percent of the project cost is provided through a private lender and up to 40 percent of the project is provided through Certified Development Companies under the SBA 504 program. Small business borrowers must provide at least 10 percent equity injection, which can be drawn from existing assets instead of new cash.
If interested in learning more about the refinancing program, contact Kardon or Tonya Price at MRPC at 573-265-2993 or by email at mkardon@meramecregion.org or tprice@meramecregion.org.
MRDC packages SBA 504 and 7a loan applications. SBA provides long-term, fixed-interest loans to help finance business start-ups and expansions that are creating and/or retaining jobs. The program works in cooperation with banks to induce private lenders to participate in business loans. The local board reviews and recommends SBA loans with SBA making the final decision.
The MRDC board is also responsible for reviewing and approving loans through local revolving loan funds owned by MRPC. Persons needing more information on RLF, IRP and SBA loans should contact Kardon or Tonya Price at (573) 265-2993 or email at mkardon@meramecregion.org or tprice@meramecregion.org.
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