WASHINGTON, Dec. 18, 2015 /PRNewswire-USNewswire/ -- The National Association of Development Companies (NADCO) congratulates Congress for passing the year-end omnibus, which permanently reinstates a popular debt-refinancing element to the SBA's 504 loan program. This action will create jobs, allow small businesses to refinance debt, and let them re-focus on growing their businesses.
The bill, originally introduced to the House and Senate as the Commercial Real Estate and Economic Development (CREED) Act, permanently reinstates a program that existed for 16 months between 2011 and 2012, and helped more than 2,300 small businesses refinance $5 billion in debt. When the program "sunset" in 2012, it left 400 businesses in the pipeline awaiting approval as it expired.
"I'm glad we have been able to work in a bipartisan way to address one of the biggest challenges facing small businesses – getting access to credit so they can reach their full potential," said Sen. Jeanne Shaheen (D-NH), ranking member of the Senate Small Business Committee. "I'm particularly grateful to my colleagues for working with me to pass the CREED Act, which will finally re-instate the SBA's successful 504 Refi program to help small businesses grow and create jobs. Now that our legislation is on track to become law, this program will soon be up and running, helping small businesses thrive. Small businesses are the backbone of our economy and I'm very pleased that they will soon have this option for accessing affordable credit." Sen. Shaheen, along with Sen. Johnny Isakson (R-GA), introduced the CREED Act in the Senate.
NADCO, the trade association for Certified Development Companies (CDCs) that make these loans, says the new product is valuable for expanding the program mission. "Debt refi is a fantastic tool to help CDCs in their economic development work. We are pleased Congress has brought back this valuable program," said Claire O'Rourke, Vice President of Government Relations at NADCO.
"Extending 504 refinancing has been a top priority of mine throughout my time in Congress, and so I am thrilled that the language from my bill, H.R. 2266, has been included in the omnibus bill," said Rep. Judy Chu (D-CA), who introduced the CREED Act in the House. "To meet our job creation goals, we must put more capital in the hands of job creators. Reinstating the SBA's successful 504 refinancing program will do that by helping small business owners refinance billions of dollars in old debt at no cost to the taxpayer. This is a benefit to the entire economy. Now owners can focus their resources on hiring employees and growing their businesses."
The passage is a result of bipartisan cooperation led by the House Chairman Steve Chabot (R-OH) and Ranking Member Nydia M. Velázquez (D-NY) from the House Small Business Committee, along with Senate counterparts Chairman David Vitter (R-LA) and Shaheen from the Committee on Small Business and Entrepreneurship.
"Letting small firms refinance debt through SBA's 504 program will give them greater flexibility, freeing up their resources so they can grow stronger and create new jobs," said Velázquez. "This is also important for CDCs, who now will have certainty when it comes to offering such a refinancing option to their small business clients."
Sen. David Vitter (R-LA) said, "As chairman of the Senate Committee on Small Business and Entrepreneurship, I was glad to report out the extension of the 504 refinance program earlier this year on a bipartisan basis. Once the program is implemented by the SBA, I look forward to conducting strong oversight to ensure that this initiative meets its intended goal of reducing debt costs so that entrepreneurs have more money to create jobs and grow their businesses."
For more information concerning the National Association of Development Companies, the SBA loan program or other small business success stories from NADCO-member institutions, contact Heather McNelis, NADCO director of marketing and communications at firstname.lastname@example.org or (202) 349-0070 x19. An alternative point of contact is Rachel O'Sullivan of Vox Optima, LLC at email@example.com or (760) 310-4146.
SOURCE National Association of Development Companies (NADCO)