SBA refinancing program ends this week
A federal program designed to help small businesses with commercial real estate mortgages is coming to an end this week.
The U.S. Small Business Administration’s 504 loan refinancing program, which expires Thursday, allowed companies to refinance real estate and equipment loans.
SBA 504 loans for new purchases are still available.
Through Aug. 31, 102 Pennsylvania small businesses had taken advantage of the program in fiscal year 2011-12, taking out $97.3 million in loans, said David Dickson, director of the SBA’s Philadelphia District.
Of those, 32 were for refinancing, totaling $44.8 million, he said.
The 2011-12 fiscal year runs through September.
The refinancing program, created by the Small Business Jobs Act, helped businesses that were facing moderately depreciated real estate values after the 2008 financial crisis.
Many old loans were coming due in 2011 and 2012, and companies needed to refinance to avoid large balloon payments.
“I saw the true benefit in the program to be saving business cash reserves in a crucial time when those reserves were already being tapped to weather the recession,” said Melissa McLaughlin, director of business finance for the Harrisburg Regional Chamber and Capital Region Economic Development Corp.
However, local interest in the program was minimal, she said. Only a handful of the financing projects reviewed by the chamber fit the SBA mold for refinancing.