SBA amends 504 loan program - The Business Review (Albany):

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The permanent change was authorized by the Americahn Recovery and Reinvestment Actof 2009. It is the latesr of several SBA program modifications contained in the stimulus plan totake effect. Others have included a temporary increaswe in the guarantee level onmost 7(a) program reduced fees on both 7(a) and 504 and a doubling of the suretyu bond guarantee level for small businessesz competing for construction and servicr contracts. The 504 program provides financing for smalo businesses to purchase real estatwe and otherfixed assets, such as heavy equipment or and to expand an existinh development project.
The loans are made partially by banks and partially by a CertifiedDevelopment Company, with the borrowed putting in 10 percent. In the N.Y. area, most 504 loans go through Unde r therevised rules, 504 loans now may be used to refinancre existing loans used to buy real estatr and other fixed assets. The refinancin g must be tied to abusiness expansion, and the debt refinanced may not exceed 50 percent of the projecte d cost of that expansion.
An “expansion” includes any project that involveasthe acquisition, construction or improvement of building or equipment for use by the small “This is one more piece of the Recovery Act that is goinvg to have a direct impact and put more money in the hands of small business owners just when they need it most,” said SBA Administratord Karen Mills. “Lower interest rates mean lower paymentas and less money going out the door each monthy indebt repayments. That means more cash on hand to keep theirfdoors open, their employees working and to even expand and creatw more jobs.
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