ORLANDO, Fla., Aug. 8, 2012 /PRNewswire-iReach/ -- Two of the most effective economic recovery programs expire in late September unless Congress ends its election-year deadlock and extends them. The refinance provision of the U.S. Small Business Administration (SBA) 504 loan program allows small business owners to refinance commercial mortgages with longer-term, below-market, fixed interest rates afforded by the SBA 504 program.
The First Mortgage Lien Pooling (FMLP) program creates a secondary market where lenders can re-sell a portion of SBA 504 first mortgage loans, allowing them to increase their liquidity and capacity to make more small business loans. Both initiatives face expiration at the end of September.
SBA loan volumes increased in late 2011 and 2012 due in large part to the SBA 504 refinance and FMLP programs. According to SBA data, SBA 504 refinances accounted for 14.7 percent of all SBA 504 loans made in the first quarter of 2012, and 20.6 percent of total SBA 504 dollars during that time period. Nearly 15 percent of all SBA 504 loans made today are FMLP loans. Both government initiatives are self-funded by supplemental fees to program applicants and lenders.
"These two threatened initiatives significantly expand the benefits of SBA 504 financing for small businesses in the U.S. at a time when our economy needs businesses to grow and create jobs," said Chris Hurn, CEO of Mercantile Capital Corporation. Hurn's company is a nationwide small business lender specializing in SBA 504 loans for small business owners who want to acquire, develop or refinance their own facilities.
In an effort to save the two SBA lending programs, Hurn launched an online petition at http://www.change.org/petitions/the-u-s-senate-save-the-sba-fmlp-and-refinance-programs asking the U.S. House of Representatives Committee on Small Business and U.S. Senate Small Business & Entrepreneurship Committee leaders to extend the two programs by one year each.
Availability of capital remains one of the most critical issues facing the small business sector in the U.S. today. Despite record-low commercial loan interest rates and easier access to lending capital for major banks, heavy regulatory pressure has limited traditional lenders from approving more small business loans. According to Hurn, excessive regulations on major banks have made it nearly impossible for even successful small businesses to obtain financing.
"The FMLP program has become the only viable financing source for assisted living facilities, daycares, auto repair shops, restaurants and hotels because conventional lenders generally won't finance these types of properties," said Hurn. "Dozens of small business owners we've worked with this year wouldn't have been able to get funding without one or both of these programs."
The Small Business Jobs and Credit Act of September 2010 established the SBA 504 refinance provision and the FMLP program as temporary initiatives — only 24 months each. However, bureaucratic delays (14 months for SBA 504 refinance and 19 months for FMLP) in Washington hampered the utilization and impact of these programs for the small business sector.
A three-time member of the Inc. 500|5000 list of America's fastest-growing businesses, Mercantile Capital Corporation focuses on providing SBA 504 loans for small business owners to acquire, enhance or refinance their own facilities. For more information on Mercantile Capital, a wholly-owned subsidiary of Old Florida National Bank, call (866) 622-4504 or visit http://www.504Experts.com.
Editor's Note: Mercantile Capital can provide local small businesses owners who have recently used the SBA 504 refinance and/or the FMLP.
Media Contact: Chris Hurn Mercantile Capital Corporation, 407-786-5040, firstname.lastname@example.org
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SOURCE Mercantile Capital Corporation