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Economic Stimulus & The Recovery Act

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SBA 504 Loans and the Economic Stimulus - Refinance Now Possible

Economic Stimulus Bill - Summary of Changes to the 504 Loan

As a result of the Stimulus Package and The American Recovery and Reinvestment Act the SBA has enacted the following changes:

  1. You can now use the SBA 504 loan for a refinance of commercial property

  2. 504 loan fees have been temporarily eliminated

  3. You can now borrow more money if you build some energy efficiency into your property or if you use or produce renewable energy

  4. Larger businesses can now qualify for the 504. Businesses can now have a net worth up to $8.5 million, and net (after tax) income of up to $3 million. (Please note: This figure was recently updated to $15 million and $5 million as part of HR 5297).


SBA 504 Refinance Now Possibleeconomic stimulus

The SBA 504 loan program guidelines now allow refinancing of commercial property. This was not possible before and this is a permanent change.

Business Expansion Loans

The SBA has released a short summary of conditions under which a refinance is possible, and they have stated that a refinance needs to be part of a business expansion - although they left the definition of expansion fairly vague.

As a result, it is not entirely clear which projects are going to be eligible for refinancing as the information is so new so please contact us for clarification. This too has been updated and SBA is expected to release new underwriting guidelines for refinancing by the end of 2010.

You can call us directly at 1-800-414-5285 as we may have a better understanding with each passing day.


New Legislation

In addition to the current legislation, there has been new legislation passed that will allow a 504 loan to be used by a business to get a more favorable interest rate and term. Please visit our 504 Refinance information page for more details as we will be updating it as often as possible.


SBA 504 Loan Fees Waived as Part of Economic Stimulus

The required fees that are payable to the SBA when obtaining a 504 loan have been cut by roughly 2/3rds with a subsidy from the American Recovery and Reinvestment Act. Typically these fees amount to 2.25% of the loan balance so this creates some significant savings. The funds that have been made available to create this waiver are expected to last until at least the end of 2009.


Larger Loans for Energy Efficient Properties and Renewable Energy

The stimulus bill has doubled the maximum loan amount available for Green Building and Renewable Energy Production.

The changes will bring about significant savings for business owners looking to purchase or refinance commercial real estate.

Click here: Small Business Administration 504 Loans - for detailed information about requirements and qualifying for a 504 Loan.

Please call us for additional information or fill out a contact form and let us know you would like us to get back to you once more information is available. Full details should be available in April 2009.


contact us to find out more!

Please contact us at 1-800-414-5285 for more information about SBA 504 real estate loans.