One of the biggest questions EDC Finance has fielded in 2013 is ‘When will SBA 504 debt refinance return?’ The National Association of Development Companies (NADCO) is the SBA 504 trade group that has been working with the various legislative bodies to reinstate the popular Debt Refinance provisions that expired in September of 2012. The good news is that a principal agreement is in place within the Senate Committee on Small Business and Entrepreneurship, which would make “Debt Refi” a permanent component of the SBA 504 program. The bad news is that the agreement requires the traditional SBA 504 program to meet certain budgetary requirements in order for the refinance options to become available.

NADCO continues to work on potential solutions that could bring the 504 refi program back for FY 2014, but absent those solutions, the program may have to wait until the FY 2015 budget is released in February. The SBA and NADCO have indicated the national 504 portfolio has recovered as the real estate market has recovered, meaning the traditional 504 budget looks much more favorable for debt refi in the near future.

EDC Finance saw first-hand the benefit of the SBA 504 refinance program for commercial borrowers in South Central PA and will continue to keep you updated on any progress with bringing the program back. Keep in mind the traditional SBA 504 program continues to bring great benefits to those companies that are taking on new projects. The traditional program does allow a limited amount of debt refinance to be included if a company is expanding. If a potential project exists, feel free to call an EDC Finance loan officer to discuss the specifics and discover the options.

EDC Finance Corporation
by Erin Lyons