The White House is proposing using the SBA 504 loan program to help small business refinance real estate. In the plan the SBA (Small Business Administration) would have the lending cap increased from $2 million to $5million and the SBA Express loan would go from $350,000 to $1 million under the proposal.
Obama has been echoing his remarked about helping small business that he made in the State of the Union speech. The President also acknowledge that the unemployment numbers still have a way to go,
“while positive, are a cause for hope, but not celebration”.
In his remarks he also stated how many jobs small business has created in the past,
“Over the past 15 years, small businesses have created roughly 65 percent of new jobs in America.”
In his proposal the SBA would have the ability to refinance commercial real estate that is owner occupied. Currently the SBA 504 loan program is not authorized to do this type of loan guarantee. The SBA Uses Community Development Company (CDC) to fund up to 40% of the loan amount. The CDC is a nonprofit organization and is available to help small business fund loans.
The National Association of Development Companies (NADCO)
The trade association for the nation’s Certified Development Companies. On their website www.nadco.org they explain the CDC has two goals. (1) To provide financing for business expansion through purchasing of fixed assists, (2) stimulation the local economy by increased tax revue and job creation. The Obama plan would add refinancing to this list.
The President also said in his remarks,
“the true engine of job creation will always be businesses” and added “America’s small businesses are counting on us”.
