The United States Small Business Administration (SBA) is often responsible for getting entrepreneurs the investment loans they need to grow their businesses, expand their product lineup and develop new technologies. However, after a temporary program expired last year, some company leaders lost access to the 504 Debt Refinance Program, which provided small-business owners with long-term, fixed-rate loans that helped them invest in major expansion or modernization plans.
Will the program make a comeback?
The program expired several months back, but Jeanne Hulit, an associate administrator for the SBA, said the organization supports reinstating it. She claims the program will provide benefits to hundreds of business owners across the country and allow them to grow, hire and spur economic growth. United States Senator Mary Landrieu recently introduced legislation, the Commercial Real Estate and Economic Development (CREED) Act, that would restart the debt refinancing program, which could be a major boost to entrepreneurs seeking business financing. The bill has bipartisan support, with United States Senators Jeanne Shaheen, Clair McCaskill and Johnny Isakson as its cosponsors. The plan has also seen support from the National Association of Development Companies (NADCO), which believes an extension of the 504 Debt Refinance Program could help business owners, workers and the economy.
"At this time in our economy, with unemployment still stuck at 7.7 percent, it is imperative that Congress enact measures like the CREED Act to help small businesses access the capital they need to create jobs," said Beth Solomon, president and CEO of NADCO. "This is a no-brainer for both sides of the aisle."
How can small-business owners obtain lending?
Bloomberg reported there is some skepticism the CREED Act won't be successful in Congress, which would result in fewer business owners receiving the loans they need to grow. Even if the legislation doesn't pass and the 504 Debt Refinance Program is not reinstated, there are other ways for entrepreneurs to find the business loans they seek. While some borrowers may turn to larger banks that promise the world, they may actually have more success working with small and mid-sized local banks. Not only do these institutions often provide more lending and better access to SBA loans, they can also give clients better service than their larger counterparts. Smaller banks have the luxury of offering more personalized options for business owners and can sometimes customize aspects to ensure their companies are successful and have the right cash management solutions.
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