SBA 504 Temporary Debt Refinancing Program

The U.S. Small Business Administration (SBA) has temporarily authorized the refinance of existing business debt through Certified Development Companies such as Greater Syracuse Business Development Corp. (GSBDC) under the SBA 504 Loan Program.  The refinance program is set to expire on September 27, 2012.  The Program highlights are as follows:                                                                        

  The refinance cannot be part of a small business expansion.

  The applicant must have been in business for more than two years.

  Debt to be refinanced must be a commercial loan which was acquired more than two years from the date of application, not subject to a government guaranty or part of an existing 504 project, not owed to an Associate of the applicant, collateralized by 504 eligible fixed assets that at least 85% of the proceeds from the original loan were used to acquire, and current on all payments for the 12 months preceding the date of application.     

  Loan to Value of the fixed asset cannot exceed 90% of the current Fair Market Value.           

  As part of the refinance, borrower may use additional available equity in the collateralized property   to finance “eligible business expenses” such as salaries, utilities, inventory, etc.  Those business expenses must be incurred but not paid, or become due within 18 months after date of application.

  The funding for the Refinance Project must include an amount from a Third Party Lender at least equal to the 504 financing, with at least 10% coming from the borrower’s equity.

 For more information call Peggy Adams, Executive Director (315-373-0273), or Kathy Campbell, Client Manager (315-373-0348) at Greater Syracuse Business Development Corp.

 

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