Bernstein & Feldman, P.A.

Providing Personal Counsel
And Representation For Over
30 Years

Expiration of SBA loan program a challenge for small businesses

Commercial real estate loans valued at more than $300 million are scheduled to mature before 2017, and some of these loans are likely held by small business owners in North Carolina. While the economy continues to improve in the wake of the 2008 financial meltdown and subsequent recession, many business owners will find it difficult to secure the loans necessary to refinance this maturing debt due to the more stringent lending criteria introduced following the crisis.

Business owners able to qualify for a commercial real estate loan will likely benefit from low interest rates, but many others will be unhappy with the decision not to extend certain provisions of the 504 loan program offered by the U.S. Small Business Administration. The program enhancements were introduced in the wake of the financial crisis, and they were designed to assist small business owners by providing them with access to capital on favorable terms. The provisions expired in 2012.

Advocates for small and medium sized business owners have called upon Congress to renew the expired SBA 504 loan provisions, but there is no certainty that these calls will be heeded. Entrepreneurs in need of commercial real estate financing may wish to take a proactive approach and begin shopping for a mortgage well in advance of the maturity date of their current loan. They may also consider applying for an SBA 7(a) loan, which can still be used for refinancing purposes.

An experienced attorney may be able to help small and medium sized business owners avoid the financial difficulties that could be caused by maturing loans by closely scrutinizing proposed refinancing agreements before they are signed. An attorney could explain the financial obligations that will be faced upon maturity and might also recommend alternative sources of financing.

No Comments

Leave a comment
Comment Information