This morning, David Sada, SVP, Senior Client Manager/Business Banking with Bank of America Merrill Lynch circulated this email which summarizes the details and changes to the SBA program which opens a temporary refinancing opportunity for real estate mortgages maturing after December 2012:
This significantly expands the number of small businesses eligible to take advantage of this program. Originally, the SBA regulations limited eligibility only to mortgages with balloon payments due on or before Dec 31, 2012. The expansion announced today lifts that limitation.
SBA will issue an official policy notice prior to April 6th that is expected to include additional “technical adjustments” to the program that will enhance its effectiveness.
- Keep in mind, the SBA 504 Refi program has only a 2-year life – it will end in October 2012 – and a limited allocation of funds. Do not wait to take advantage of this opportunity to provide attractive, stable, long-term financing for your clients who have mortgages based on real estate values that have declined over the past two years.
- Refinance existing, non-SBA, commercial real estate debt using SBA 504, below-market, FIXED rate financing.
- You can refinance loan amounts up to 90% of current appraised property value (or 100% of the outstanding principal – whichever is lower). Loans in excess of 90% of appraisal can be refinanced with additional collateral.