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Blog Post
SBA Economic Aid: Temporary 504 Loan Program Change - Refinancing of Third-Party Loans
East Texas Regional Development Center • Mar 12, 2021
On February 26, 2021, the SBA issued Procedural Notice 5000-20099 authorizing East Texas Regional Development Company (ETRDC), a Certified Development Company (CDC), the opportunity to refinance Third-Party Loans on existing 504 Projects. This Notice is part of Section 328(c) of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), enacted on December 27, 2020 (Pub. L. 116-260). The CDC may allow a Third-Party Loan on an existing 504 Project to be refinanced only once under the authority of Section 328(c) of the Economic Aid Act.
The refinance must be an amount that, when combined with the outstanding balance on the subordinate 504 loan, is not more than 90 percent of the total loan to value, as evidenced by an appraisal. The Third-Party Lender must provide the appraisal to the CDC free of charge (except for reasonable charges for photocopies). Any loan that refinances the Third-Party Loan of an existing 504 Project under this temporary authority must be closed and funded no later than December 26, 2021.
“We have been given the unique opportunity to offer one-time refinancing of existing 504 projects. In my years of lending, I have never seen this happen before. Our office is already seeing inquiries and applications from small businesses across the state taking advantage of this opportunity”, stated Chuck Vanderbilt, Lending Manager for East Texas Regional Development Company.
The Borrower should have a satisfactory credit history, should provide a description of how the new funds will be used and must demonstrate the ability to repay all the obligations from the operations of the operating concern on which the loan is based.
- 10-Year Term: 2.68%
- 20-Year Term: 2.99%
- 25-Year Term: 3.04%
For more information, please call Chuck Vanderbilt, ETRDC Lending Manager, at 903-218-6411
or chuck.vanderbilt@etcog.org.
The East Texas Regional Development Company will sponsor an East Texas Lenders Roundtable hosted by UT Tyler-Longview Small Business Development Center (SBDC) and the Small Business Administration to discuss SBA 7a loans and 504 lending basics. Expert panelists will discuss various loan programs and resources to help businesses increase their portfolios and obtain financing.
The Office of the Governor has announced the launch of a new recovery program, the Texas Travel Industry Recovery Grant Program (TTIR), which will begin accepting applications on July 6, 2022. The purpose of this program is to provide grants to Texas businesses in the tourism, travel, and hospitality industry that were negatively impacted due to COVID-19.
Applications Due by December 31
Administered by ETCOG