WASHINGTON, D.C. – U.S. Senators Olympia J. Snowe (R-Maine), Mary L. Landrieu (D-Louisiana), and Jeanne Shaheen (D-New Hampshire) have introduced legislation, S.2364, that would extend for one year a provision allowing small business owners to use Small Business Administration (SBA) 504 loans to refinance existing commercial mortgages. The measure, originally enacted as part of the Small Business Jobs Act of 2010, did not become operational until February 2012, significantly shortening the period of time that business could use 504 loans to refinance qualifying existing debt. It is set to expire on September 27, 2012.
“Access to capital is lifeblood for our nation’s small businesses and entrepreneurs,” said Senator Snowe, Ranking Member of the Senate Committee on Small Business and Entrepreneurship. “SBA’s 504 loan program has helped create over 2 million jobs at no cost to taxpayers. Reauthorizing this refinancing provision will allow the measure to aid more business owners for an additional year.”
“Extending the 504 refi program is a common-sense way to help small businesses and create jobs,” said Senator Landrieu, Chair of the Senate Committee on Small Business and Entrepreneurship. “By allowing small businesses to refinance qualified commercial real estate debt, this program lowers their monthly mortgage payments at no cost to taxpayers. At a time when we are still facing high unemployment, this extension is one of many things that we should be doing to put more capital in the hands of America’s job creators.”
“By allowing small businesses to use this program for refinancing, we are giving them access to historically low interest rates and cost stability that will allow them to expand and add jobs,” said Senator Shaheen, a member of the Committee. “Small businesses in New Hampshire need access to capital and this program is achieving that at no cost to taxpayers.”
The 504 loan program is a long-term financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets for expansion or modernization. Certified Development Companies (CDC) work with the SBA and private sector lenders to provide financing to small businesses under the 504 loan program. A CDC is typically a private, nonprofit corporation set up to contribute to the economic development of its community. The Small Business Jobs Act of 2010, enacted on September 27, 2010, allowed small businesses to use the 504 loan program to refinance certain qualifying existing debt for two years, but the SBA did not promulgate regulations to implement the refinancing provision until February 17, 2012.
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