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The SBA’s New Loan Programs Geared to Help Small Business Owners

March 15, 2011

The SBA has rolled out new loan programs this spring geared to help entrepreneurs and small business owners deal with the loan issues commonly faced during this slow economic recovery.

Community Loan Advantage and Small Loan Advantage Programs:
These two new loan programs aim to streamline and expedite the process of requesting loans and increase the availability of loans up to $250,000. The Small Loan Advantage Program encourages larger “preferred” lenders such as Bank of America ans U.S. Bank to grant lower-dollar loans, benefitting small businesses and those in underservedmarkets. The Community Loan Advantage Program follows the same purpose but extends availability of SBA loans to “mission lenders”. These primarily include mission-focused and not-for-profit lenders that have been  involved in community economic development.

Commercial Mortgage Refinance Program:
This temporary refinancing program under the 504 loan program allows for the refinancing of commercial mortgages for owner-occupied property and is set to expire in 2012.

“The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years,” said SBA Administrator Karen Mills. “As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs.”

The loan will allow the lender to take a first mortgage and refinance it, even if the property has declined in value. A key feature of the new program is that it does not require an expansion of the business in order to qualify.

Sources:
http://www.sba.gov/advantage
Bloomberg Businessweek
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