ALERT! SBA AUTHORIZES REFINANCING OF COMMERCIAL REAL ESTATE LOANS!!

Beginning February 28, 2011 and ending September 27, 2012, borrowers can finance up to 90% of the current appraised property value or 100% of the outstanding principal, whichever is lower, plus 504 eligible refinancing costs.

If you can benefit from this refinance program contact CMDC today to start the SBA 504 loan application process. 763.784.3337

Click on the following link for details:

[504 Refinancing Fact Sheet]

SBA 504 Refinance Highlights:

The debt being refinanced must been incurred at least two years prior the SBA loan application date.

The small business must have been in operation for at least two years prior to the SBA application date.

The loan being refinanced must have been current for the 12 months prior to the SBA application date (no payment was either deferred or more than 30 days past due). This will be confirmed by SBA reviewing the loan transcript history.

At least 85% of the original loan proceeds must have been eligible for SBA 504 financing. Eligible costs include the acquisition, construction, or improvement of long term assets (real estate or long term equipment).

The new Third Party Lender (bank) loan must be at least 50% of the available collateral. The SBA 504 loan must be no more than 40% of the available collateral.

The Borrower contribution must be at least 10% of the Refinancing Project. The borrower contribution can be in the form or cash, equity in the project collateral or equity in other fixed assets available for collateral.

The new Third Party Loan and SBA 504 loan may be no more than 90% of the collateral fair market value. In no event may the new loans exceed the balance of the existing debt being refinanced.

The collateral must be verified by a current fair market value appraisal. The appraisal must be no more than 6 months old at the SBA application date.

The SBA must be listed as an authorized user of the appraisal.

If the amount of the refinancing is not sufficient to fully satisfy the existing loan, the CDC must disclose how the deficiency is being handled. The lender may forgive all or part of the deficiency, accept cash payment from the borrower or accept a new note for the balance, which will be subordinate to the liens securing the Third Party Loan or the 504 loan. SBA may require any additional subordinate loans to be on standby for a period of time.

The 504 Refinance Program must not be used to refinance loans that have already benefited from a federal guarantee. Ineligible loan types include: SBA 7A loans, SBA 504 loans, the Third Party Lender portion of a 504 project, USDA loans etc.

Call today for more information! 763.784.3337