SBA expands commercial refinancing program in Georgia

by LJ Miehe on March 31, 2011

Editor’s Note: It has been clear to me that some program would need to form to help refinance commercial loans that were made during the go-go days and now do not pencil for current lending requirements.  The Small Business Administration in Savannah, Georgia.  We are going to see more of these programs pop-up once enough commercials loans come due that cannot be refinanced through conventional methods.  We have hinged part of this recovery on assisting small business and the real estate market.  They will not let the commercial building owners go into mass default because that will reduce other spending in the area and if these owners operate other businesses, it could trigger them to have to cut back their to cover their costs.  This recovery is on very fragile footing.

Savannah Now – In recent weeks, the Small Business Assistance Corp. in Savannah has been working with six businesses to refinance their commercial real estate mortgages under a federal program, but it turned away a dozen more.

Most of them had mortgages that matured after Dec. 31, 2012, which was the cutoff date for the 504 refinancing program by the U.S. Small Business Administration. Then, this week, the administration announced that businesses with mortgages maturing after that date also will be eligible.

“Borrowers and banks have been complaining like crazy that that’s a very limiting factor,” said Tony O’Reilly, president of the Small Business Assistance Corp., a nonprofit business development organization in Savannah. “This (change) is a reflection of public input.”

The program will be in effect through Sept. 27, 2012, or until the money is gone. It’s given on a first-come, first-served basis.  Under the Small Business Jobs Act of 2010, Congress authorized the Small Business Administration to approve up to $15 billion in loans under the program — $7.5 billion each in fiscal years 2011 and 2012.  Together with the first mortgage, the temporary program will provide up to $33.8 billion of total project financing.

Additional fees charged to the borrower will cover the cost of the refinancing program, and no loan subsidy will be needed from taxpayer funds. The program is expected to benefit as many as 20,000 businesses nationwide.

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