The U.S. Small Business Administation’s 504 Refinance Program was suspended in 2012, the same year Wisconsin led the nation with $132 million of loans made using the platform.
Now, the program has been reinstated on a permanent basis. The loans will be available again beginning June 24.
The 504 Refinance Program allows small business owners to refinance eligible fixed assets and business expenses, which aims to ease business’ financial burdens and drive economic development. It was made permanent by SBA administrator Maria Contreras-Sweet through an Interim Final Rule in The Federal Register released May 26.
Wisconsin spread that $132 million of funds over 146 refinance loans in 2012, said Shirah Apple, public information officer for the SBA’s Wisconsin District Office.
“Four years later, not a single one of those loans is in default,” Apple said.
Much of the activity was driven by the Wisconsin Business Finance Development Corp., the state’s largest SBA lender by far, she said. It’s expected there is some pent up demand statewide for the program today.
“As both a former small business owner and a banker, I know firsthand that access to capital is the single most important factor in the survival and growth of a small business,” Contreras-Sweet said in announcing the program. “The 504 loan program, with its long-term fixed rate can help refinance debt from adjustable rate loans with significant savings to borrowers. Paying off existing loans with a new loan at a lower cost can help increase cash flow, which can be especially helpful in a resurgent economy. That’s why I’m so proud to announce this final rule making 504 Refi permanent.”
SBA is authorized to approve up to $7.5 billion for the regular 504 Loan Program and $7.5 billion under the 504 Debt Refinancing Program. The 504 Debt Refinancing Program will only be available in fiscal years during which no government subsidy is required.