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The Small Business Jobs Act will expire on September 27.  This means that you only have a few weeks to refinance your business premises at below-market, long term fixed rates.  Courtney Rubin at OpenForum.com enumerates the requirements to qualify for the program.  One of which is that you have to occupy more than half of the property to be refinanced.  Your existing loan payments should be current; you should not be eligible for 504 projects or other government-guaranteed loans.   The program aims to help small businesses with maturing loans on properties where values have declined because of the recession.

The program lets borrowers finance up to 90 percent of appraised property value, with a “cash out” option that you can use to pay for eligible expenses such as payroll, inventory and accounts payable. It was designed to help out small businesses that have loans maturing—in particular, commercial mortgage loans for properties whose value almost certainly has declined due to the recession.

The goal is to help small firms cut down on the amount of money they have to commit to paying mortgages and have more available for other ongoing business expenses.

Clearing the Bar

To qualify for the program, you must meet the following requirements:

• Occupy 51 percent of the property to be refinanced
• Existing 504 projects and government-guaranteed loans are not eligible
• Show that you are current on existing loans, with no payments more than 30 days past due over the last year
• The debt to be refinanced must have been incurred at least two years before your application date, though the loans don’t have to mature before that date. (The SBA actually expanded the program to include loans maturing after Dec. 31, 2012.)

Further Incentive

If you need any further push to get moving, consider that other refinancing options are very limited. While 80-percent to 90-percent loan-to-value mortgages used to be available before the recession, 60 to 75 percent is standard today. Plus, of course, you’ll need a larger cash flow ratio, a stronger balance sheet and higher personal credit scores.

The program is structured like the SBA’s traditional 504 loan program, which means borrowers work with third-party lending institutions and the SBA-approved Certified Development Companies to get financing (the split is 10 percent/50 percent/40 percent). But unlike the traditional program, this one does not require the third-party lender to contribute 50 percent—only an amount equal to or greater than the SBA amount. …

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