The Small Business Jobs act, signed September 27, expired December 31, 2010 meaning the lenient provisions under the SBA program are gone. The previous guarantee limits were for 90% of the project…meaning a business owner would only need to come up with a 10% deposit. Since this program expired, business owners now need to come up with 25% as a deposit under an SBA program. This means on a re-finance or commercial real estate transaction, business owners are facing a significant down payment as well as higher fees from them SBA.
Any SBA loans that did not fund as part of the SBA Jobs Bill provision by the 31st are now condition red…meaning no new applications are being accepted in the loan queue as part of the jobs bill. Even those in the queue have a remote chance of funding, as an existing approved client needs to cancel their loan for someone on the waiting list to secure funds. The alternative is for those in the queue to cancel their loan and re-submit under the new guidelines.
Unless a new bill is passed, owners need to be prepared for higher down payments this year on commercial real estate purchases and re-financing. The chance of a new bill being pass is low as congress is trying to cut costs to fight the budget.
Expect the commercial real estate market to remain weak as most businesses do not have the capital to commit to a hefty down payment. However if you are planning on moving and have the capital you will find desparate owners willing to negotiate to try to move their property.
Any SBA loans that did not fund as part of the SBA Jobs Bill provision by the 31st are now condition red…meaning no new applications are being accepted in the loan queue as part of the jobs bill. Even those in the queue have a remote chance of funding, as an existing approved client needs to cancel their loan for someone on the waiting list to secure funds. The alternative is for those in the queue to cancel their loan and re-submit under the new guidelines.
Unless a new bill is passed, owners need to be prepared for higher down payments this year on commercial real estate purchases and re-financing. The chance of a new bill being pass is low as congress is trying to cut costs to fight the budget.
Expect the commercial real estate market to remain weak as most businesses do not have the capital to commit to a hefty down payment. However if you are planning on moving and have the capital you will find desparate owners willing to negotiate to try to move their property.
No comments:
Post a Comment