Although residential real estate tends to draw the big headlines, commercial real estate has also taken a hit in recent years, due in part to a decline in property values. To help alleviate some of the problems, the U.S. Small Business Administration (SBA) is introducing a program that will help owners of small commercial properties refinance their mortgages.
The SBA temporary refinance program, which starts April 6, will apply to commercial real estate mortgages that will mature after December 31, 2012. Those small businesses that qualify will then be able to get more secure financing for their properties.
This new program follows a temporary refinancing program the SBA initiated under the Small Business Jobs Act of 2010 to bring relief to small businesses with mortgages reaching maturity or those facing balloon payments. The ultimate goal is to avoid foreclosures for those small businesses with mortgages established during the recession.
Eligibility requirements for businesses include being in operation for at least two years, having owner-occupied real estate, and having payments of debt current for the past 12 months. The loan will mimic standard 504 loans.
The funding for this program comes from the Jobs Act, which gave the SBA the power to authorize $15 in loans. Ultimately, the program will help small businesses with up to $33.8 billion in financing.
For more information about the temporary Job Act Debt Refinance program, you can visit SBA.gov and read the frequently asked questions.
Feature image, courtesy: Katia Gelman.