Refinancing a mortgage or loan can save small businesses and help them grow. Image Link: http://www.sxc.hu/browse.phtml?f=download&id=1191114

A new temporary program from the Small Business Administration(SBA) can help small business owners refinance their loan before the balloon payment is due. Similar to the traditional SBA 504 loan, borrowers provide 10 percent equity and work with third-party lending institutions to obtain a standard 50 per cent/40 per cent split loan financing. The new feature announced this past year can help businesses avoid balloon payments they may be facing before December 31^st, 2012. Businesses no longer need to be expanding to qualify for the program.

The SBA began taking applications in February 2011 and will continue running the program until September 27, 2012. This new program has been authorized temporarily by the Small Business Jobs Act. Seeing the need to help small businesses with balloon payments coming up before December 31, 2012, the SBA made the program available immediately. Once the program is complete its successes and disadvantages will be reviewed and the SBA will consider opening this program again in the future.

Taking advantage of this opportunity can help small business owners refinance up to 90 percent of their property value or 100 per cent of an outstanding mortgage. When applying for this loan keep in mind the money is to be used for refinancing only, no other business expenses qualify under this program.

Other qualification requirements include:

• The loan must be at least two years old.
• The loan must have had payments made on it over the last 12 months.
• The original loan must have been used to fund 85 per cent of real estate or equipment acquired.
• The loan must not be a federally guaranteed loan.

The SBA has also announced a Dealer Floor Plan Program where borrowers can get a 75 per cent guarantee for loan amounts from $500,000 to $5 million. This program will run until September 30, 2012. Any credit line will be approved prior to the expiration date and loans have from one to five year maturity times. This type of loan is great for a business requiring lines of credit to obtain titleable inventory for resale.

The Small Loan Advance Program also helps small businesses. It provides loans up to $250,000 with an 85 per cent guarantee and loans are process in a matter of minutes through E-Tran. This program also allows lenders to use their own loan document.

Being approved up to $15 billion for loans under this program can help up to 20,000 businesses.

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