SBA Lending Programs: The New Rules
HR 5297 - The Small Business "Jobs and Lending" Bill was signed into law on September 27, 2010 and it included numerous provisions significantly improved access to credit for many small and mid sized businesses.
Small Business Jobs Bill(s) Highlights:
- Commercial mortgage refinance with the 504 program
- New higher loan amounts for the 7a and 504 programs
- Extension of the 90% SBA Guaranty (this has since expired)
- Extension of the current SBA Fee Waivers (expired)
- Increased size limitations for small and mid-sized businesses
SBA Jobs Bill in Detail
1. A Commercial Mortgage Refinance will be possible with the 504 loan. This temporary change allows a commercial mortgage refinance using the SBA 504 program without a business expansion requirement.
This is a temporary change (for 2 year period) but it could help a lot of businesses refinance their commercial mortgage loans.
Click here: SBA Refinance for detailed info.
2. Large increase in the maximum SBA loan sizes
a) The maximum SBA 7a loan will go from $2 million to $5 million
b) The maximum SBA 504 loan will increase as follows:
Keep in mind that the 504 loan is only the second mortgage piece of 504 transaction and it only accounts for anywhere from 30 to 40% of the total financing, so we are talking about potentially much larger SBA transaction amounts with this change.
- from $1.5 million to $5 million for "standard" 504 loans
- from $2 million to $5 million for loans that meet SBA public policy goals
- from $4 million to %5.5 million for loans to small manufacturers or SBA Green Loans
3. Extension of SBA 90% guaranty. The 90% SBA guaranty is extended through the end of 2010. The 90% guaranty is very important at the moment as it gives a lender a lot of security.
It would revert back to permanent levels of 85% for loans up to $150,000 and 75% for loans of more than $150,000.
4. Temporary extension of the waiver for SBA loan fees through the end of 2010.
5. Increase the size standards for companies that are eligible for an SBA loan. Companies with a tangible net worth of up to $15 million or net income of $5 million a year could qualify.
There is a lot more to this bill and we will be updating this info shortly. In the meantime, you may find more up to date info on our blog by clicking this link: SBA 504 blog
More SBA 504 Loan info: 504 Loans
Please contact us at 1-800-414-5285 if you need help with SBA financing.