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.
“The SBA Refinance program provided a way to refinance my buildings and use the equity to completely pay off my commercial bank debt,” said Kirk Butler, owner of Cactus Stone and Tile in Phoenix and 2012 refinance loan recipient.
If interest rates begin to rise, many small businesses will be challenged to qualify for a conventional refinance 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 more by visiting SBA-504 Refinance.
CDC Small Business Finance is a not-for-profit lender that provides capital to small businesses so they can expand, grow and create jobs in California, Arizona and Nevada. The company specializes in SBA lending, but also offers the Community Advantage loan for working capital, equipment, inventory, tenant improvements and business acquisition. In 38 years, CDC has helped create over 170,000 jobs by leveraging more than $12 billion in loans to over 10,000 small businesses.