SBA Hits Record, Modifies Refinance Program

2011 SBA eblast header

Your Monthly Update on Rates and Industry News

October 2011

Low Rates & Refi Changes: The Million Dollar Difference

The Small Business Administration (SBA) just announced its latest round of changes to the SBA 504 refinance program, making it even more beneficial to small businesses looking to refinance their loan or expand their capacity. The combination of new 504 refinance guidelines and historically low interest rates could make a difference to small business borrowers in the millions of dollars.

Using the SBA 504 loan program, borrowers can lock in a 20-year, fixed-rate loan. In addition to its desirable rate and term, banks hold less risk, making it a win-win for everyone!

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Tip of the Month: New SBA Refi Guidelines

The Small Business Administration's (SBA) latest changes to the SBA 504 refinance program simplify the lending process while expanding its uses. The changes could be a much-needed boost to the local business community because of the following added benefits:

Working capital can be included in the refinance for up to 18 months.
If the loan-to-value is below 90 percent, the bank and SBA can split the loan with each party covering 50 percent.
If the loan-to-value is below 50 percent, the bank and CDC each provides 50 percent of the value.
A refinance is now possible even if the loan was in deferment over 30 days or was in interest only status as long as the borrower paid the modified terms.
An escrow account or interim lender may be used for closing.

These are simplified explanations of the changes the SBA made to its 504 refinance loan program. If you have questions or would like a 504 specialist to present the details to your bank, commercial real estate or finance staff, please contact Steve Grelle at 314.615.7681.

October Rates

4.45%
SBA 20-year fixed

3.53%
SBA 10-year fixed

for complete listing of October rates.

October Headlines

SBA Hits Record

It was a no-brainer for Tom Couvion. Getting a U.S. Small Business Administration-backed loan was the only way he was going to grow his Alternative Die & Mold Inc.

Businesses Could Save Millions on Refi - If Only They Would Apply

Like homeowners, small businesses with good credit can save some real money these days by refinancing their mortgages to take advantage of low interest rates.

Jobs Act Loan Incentives Led to Record SBA Loan Approval Volume, Supporting Over $30 billion

Spurred in part by unprecedented loan volume in the year's first quarter, small business loans backed by the U.S. Small Business Administration in FY2011 reached the highest mark in the agency's history.