A Small Business Administration commercial real estate mortgage refinancing program has expanded access to loans maturing after the agency’s initial cutoff point.
Small business owners with eligible CRE mortgages maturing after Dec. 31, 2012, will be able to secure financing through the SBA’s temporary 504 refinancing program. In February, the SBA said only loans scheduled to mature before Dec. 31, 2012, were eligible. With the new date change, the agency said more small businesses may avoid potential foreclosure on mortgages approved before and during the recession that were based on inflated real estate values.
To be eligible for the temporary 504 refinancing program, a business must have been in operation for at least two years, the debt to be refinanced must be for owner-occupied real estate and have been incurred no less than two years prior to the date of application, and the proceeds used for 504-eligible business expenses and payments on that debt must be current for the last 12 months.
Under the Small Business Jobs Act of 2010, Congress authorized the SBA to approve up to $15 billion in loans under this program, which amounts to $7.5 billion in both fiscal years 2011 and 2012. The program is expected to benefit as many as 20,000 businesses, the agency said.
The $730 million Harborstone Credit Union in Lakewood, Wash. was among the first financial institutions to sign on to the CRE refinancing program.