Most up-front 504 program fees will continue to be eliminated through April, thanks to legislation passed yesterday by the U.S. Congress.
Up to $40 million is made available for both 504 and 7(a) fee reductions. The source of the money is funding for 7(a) guarantees that was included in the Small Business Administration’s (SBA) regular appropriation last year.
Additional legislation is currently in the works which contains $560 million to extend the program fee eliminations until either Dec. 31, 2010, or whenever the funds are exhausted. This legislation also would provide both the $5 million debenture limit ($5.5 million for manufacturers; SBA portions) and the ability to refinance existing debt through the 504 program.
If the additional legislation is not passed by the end of April, lenders and borrowers can expect the SBA to re-activate its Recovery Act Loan Queue. Once this occurs, loans are placed into the queue awaiting the availability of funds.
