McLEAN, Va., March 20, 2012 /PRNewswire-USNewswire/ -- More than 100 members of The National Association of Development Companies (NADCO), the trade association for the nation's 270 Certified Development Companies (CDCs) are on Capitol Hill today and tomorrow to push for an extension of an SBA "504" loan refinancing program past its September 2012 expiration date.
The refinance program is designed for small businesses that have outstanding commercial loans. The 504 option allows them to refinance up to 90% of the appraised value of available collateral (the existing commercial mortgages). SBA estimates that as many as 8,000 businesses may participate in this refinancing program during the current fiscal year, which will provide up to $7.5 billion in SBA-guaranteed financing leading to total project financing of almost $17 billion. Recent interest rates have been as low as 4.91% for 20-year SBA 504 refinancing loans.
The visiting NADCO members will talk with their Senators about the benefits that the 504 refinance loans provide nationally and in their districts. Benefits include:
Small businesses can use excess equity to obtain working capital for eligible business expenses.
They can lock in long-term, fixed-rate, low-interest financing.
It will help expand those businesses, create jobs and benefit consumers too in the long term.
Participants can consolidate existing debt including balloon and/or high interest rate loans.
They can finance eligible business expenses, save capital.
Small businesses can eliminate cash-flow drain by including closing costs in the transaction.
The SBA 504 loan itself - of which the refinance program is a part -- has helped more than 130,000 businesses obtain SBA 504 loans over the past 25 years, and $50 billion in debentures have been funded, leading to more than $100 billion in small business financing projects.
Joe Wolfe, Chairman of NADCO, said, "This refinance program has already proved to be a major success, helping keep and create jobs, boosting small businesses. Also, on a net basis, it costs the taxpayer nothing. We've heard from the small businesses that our CDCs represent and they have told us they'd like the program to extend past September 2012. That will be the message we are taking to the Hill."
The National Association of Development Companies (NADCO) is the trade association for the nation's Certified Development Companies (CDCs). Our members are non-profit organizations that serve every state, as well as Puerto Rico and U.S. territories in the South Pacific. CDCs have been certified by the U.S. Small Business Administration (SBA) to provide financing to small businesses through the SBA 504 loan program. For more information, contact a CDC in your area by visiting the NADCO website, www.nadco.org.
SOURCE National Association of Development Companies (NADCO)