- SBA Lending Alert: Reauthorization of the 504 Debt Refinancing Program
- June 20, 2016 | Author: Alison W. Rind
- Law Firm: Lerch, Early & Brewer, Chartered - Bethesda Office
The day has finally come! The SBA issued SBA Policy Notice 5000-1382 on May 26 announcing the Reauthorization of the 504 Debt Refinancing Program.
This long awaited reinstatement of the program allowing lenders to utilize the 504 loan product for refinancing which was originally instituted on a temporary basis under The Small Business Jobs Act of 2010 (Jobs Act), P.L. 111-240 has been reauthorized. The refinance program is now a permanent part of the 504 program with certain statutory modifications. These changes are as follows:
- This program will be in effect only in any fiscal year where the subsidy cost is zero.
- Each CDC's new financings under the 504 Debt Refinancing Program during any fiscal year cannot exceed 50% of the dollars the CDC loaned under the 504 Loan Program during the previous fiscal year (this is waivable for good cause beginning fiscal year 2017).
- The elimination of the job retention goal under the Jobs Act has been eliminated. This means that all refinancing projects must satisfy the job creation or retention requirements applicable to any 504 Project.
According to the notice, the Sacramento Loan Processing Center will begin accepting applications on June 24, 2016.