SBA Lending Programs: The New Rules (Proposed)
The Small Business Job Creation and Access to Capital Act of 2009 is a bill that has been passed by the Senate Committee on Small Business & Entrepreneurship. It is know as S 2869 and it includes numerous provisions that could significantly improve access to credit for many small and mid sized businesses.
The House is yet to pass their version of the bill - HR 4302, but there is a lot of hope that they will do so.
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
- Extension of the current SBA Fee Waivers
- 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 would allow a commercial mortgage refinance using the SBA 504 program without a business expansion requirement.
This would allow a refinance of existing business debt without an expansion as long as the debt is current and as long as the business is retaining or creating jobs.
This would be a temporary change (for 2 year period) but it could help a lot of businesses refinance their commercial mortgage loans.
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 would be 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. This part of the bill would extend the reduced sba loan fees through the end of 2010.
6. 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 more than $5 million a year could qualify.
More SBA 504 Loan info: 504 Loans
Please contact us at 1-800-414-5285 if you need help with SBA financing.
