New (Much) Higher SBA 504 and 7a Loan Limits Proposed
Last week President Obama announced that his administration is seeking to raise the loan limits for both SBA 7a loans and SBA 504 loans.
His proposal would take the 7a loan limit from it’s current $2 million up to a rather hefty $5 million. The 7a program can be used for “any legitimate business purpose,” so this would be a huge development for small and mid sized business owners looking to finance or refinance their commercial property or business loans since many of them cannot get financing from their banks at the moment. SBA 7a loans can be used for real estate, working capital, inventory, equipment and business debt consolidation among other things.
The Obama administration has also proposed an increase in the SBA 504 loan limit to $5 million or $5.5 million for small manufacturers. Keep in mind that the 504 loan limit only applies to the second mortgage piece of the “504 program,” which is only 30 to 40% of the total financing for a given project. You can visit our main site to understand more about how this works: SBA 504 site, but basically this means that construction and renovation/expansion projects could now be in the $16 million range (technically higher).
This is very big news for business owners.
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does anyone know when the decision on the increases will be made?
Hard to say since any bill has to make it through the House and Senate. It seems they both agree that something should be done, so hopefully they will get together sooner rather than later.