SBA Launches Program for Refinancing Commercial Real Estate

We are announcing today, a program that will allow small businesses facing maturity of commercial mortgages or balloon payments before Dec. 31, 2012, to use SBA’s 504 loan program to refinance their mortgage debt. "The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years," said SBA Administrator Karen Mills. "As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs."

The program is temporary: SBA will begin accepting refinancing applications on Feb. 28, and the program is authorized to continue until Sept. 27, 2012. The new refinancing loan is structured like SBA’s traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. A key feature of the new program is that it does not require an expansion of the business in order to qualify.

Crystal Baker

Business Development Specialist

Montana Small Business Administration

10 W. 15th Street, Suite 1100

Helena, MT 59626

406.441.1089

202.741.6817 (fax)

SBA…Helping Small Businesses Start, Grow & Succeed.

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