Opportunity to lighten debt burden for thousands of small business owners
Small business owners feeling the pressure of commercial mortgage debt and facing the specter of rising interest rates can get relief starting June 24 when a new refinance program is launched by the Small Business Administration (SBA) and provided by CDC Small Business Finance.
“This is a game changer for small businesses that need financial breathing room to grow and create new jobs,” said Kurt Chilcott, president of CDC Small Business Finance, a leading non-for-profit SBA lender offering the new refinance loans.
Under the new refinance program, small businesses can take advantage of lower rates, fixed for 20 years, to lighten their monthly debt payments, improve cash flow and stabilize operations. The program allows for refinancing commercial real estate debt as well as other business debt and expenses. The current SBA-504 loan rate is 4.31%
Between $100 billion and $200 billion in commercial real estate debt is projected to mature nationwide in 2016 and 2017. Much of this debt is owed by small businesses still struggling in a lukewarm economy.
The new SBA-504 Refinance program reprises a successful pilot initiative that in 2011-2012 helped more than 2,700 small businesses refinance nearly $7 billion in high-interest debt.
If interest rates begin to rise, many small businesses will be challenged to qualify for a conventionalrefinance loan versus an SBA loan. With the new SBA-504 Refinance loan, a bank and SBA-certified lending partner will provide 90% financing, leaving a 10% down-payment by the small business owner.
Small business owners can find out about pre-qualifying for a new Refi loan by contacting a CDC Small Business Finance loan expert in California or Arizona.