The Oakland County Business Finance Corporation (BFC) can now offer eligible small businesses a chance to refinance their mortgage debt.
Under a program backed by a new refinancing loan from the U.S. Small Business Administration (SBA), small businesses that face maturity of their commercial mortgages or balloon payments before Dec. 31, 2012, may be eligible for assistance. BFC loan officers can be reached at (248) 858-0765 to determine eligibility or answer any questions.
"This is a powerful tool the Oakland County Business Finance Corporation has at its disposal to protect jobs and keep our small businesses afloat," Oakland County Executive L. Brooks Patterson said. "We realize that even small businesses performing well and making their payments on time could face foreclosure because of difficulties in refinancing and restructuring their mortgage debt."
Structured like the SBA's traditional 504 loan, borrowers must commit at least 10 percent equity and work with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. The program does not require an expansion of the business to qualify.
Borrowers may be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower, plus eligible refinancing costs. Loan proceeds may not be used for other business expenses. Existing 504 projects and government-guaranteed loans are not eligible to be refinanced at this time.
This is a pilot program. The SBA will begin accepting refinancing applications on Feb. 28 and the program, authorized under the Small Business Jobs Act, will be in effect until Sept. 27, 2012.
The SBA estimates that as many as 20,000 businesses may ultimately participate in the program which will provide up to $15 billion in SBA-guaranteed financing leading to total project financing of over $30 billion.
The BFC, authorized under the SBA's Certified Development Company program in 1982, was formed to stimulate the growth and expansion of the region's small businesses. The BFC also acts as an agent to analyze, package and submit loan requests under the SBA 504 loan program and is a servicing agent for the approved loans.