Update: 10/23/09:
The SBA and the Obama administration have proposed new higher loan limits for both SBA 7a and SBA 504 loans. Please see this related post for more up to date information: www.sba504blog.com/sba-504-7a-loan-limits/
Start of old post:
The SBA will be holding a press conference today to discuss the details of the new SBA 504 Refinance program.
Refinancing has never been available with the 504 program before and this could be a big help to some business owners.
There are some caveats with the new rule including one that says the refinance must include an “expansion,” however, the SBA has decided (in their own words) to “broadly define” what constitutes an expansion. It is unclear how banks and lenders will interpret the new rule, but any improvement on the program is welcome.
The new guideline is also going to allow a limited amount of debt refinancing, but again we will need to see how it is going to read to see what is possible.
The 504 loan program has historically been overlooked, but it has been gaining in popularity because it is commercial financing that is actually available. It is an extremely attractive loan with many uses and it is available for most healthy businesses for financing in excess of $10 million.