SBA opens 504 refinancing to more firms

The Small Business Administration will allow more businesses to refinance their commercial real estate mortgages through its 504 loan program.

The SBA initially restricted this new refinancing option to small businesses that faced balloon payments on their mortgages before Dec. 31, 2012. Beginning April 6, it will open the 504 refinancing option to businesses with balloon payments due after that date.

The Small Business Jobs Act, which was enacted last September, allowed the 504 program to be used to refinance existing loans on owner-occupied commercial real estate through September 2012. To be eligible for refinancing, the mortgage must be at least two years old, and the business must be current on its payments for the past 12 months. Borrowers can refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower.