President Biden signed into law on March 15 the fiscal 2022 omnibus spending package, which boosted the authorization levels for the SBA 504 Loan program. The action secures funding for the program through September 30 when the federal fiscal year ends.
“There had been concern the program would hit its authorized spending limit before the end of this fiscal year,” said Ashley Hruby, LCD Group senior lending director.
In recent years, the SBA has taken several steps to make the SBA 504 more appealing to borrowers. These efforts, coupled with significant demand due to low interest rates, have made the program extremely popular.
Last year, the program exhausted its authorization level before the end of fiscal year 2021. It was the first time this occurred in the program’s 40-year history.
The SBA 504 Loan program’s uses and eligibility requirements meets the needs for the vast majority of American small businesses.
The loan can be sued for land acquisitions, equipment purchases, new construction, renovation projects, leasehold improvements, and to cover professional fees such as engineering or architectural services. For-profit small businesses with a net worth of more than $15 million and with an average after-tax profit of not more than $5 million fore each of the last two years can apply.
“It checks so many boxes for so many small businesses,” observes Hruby.
Hruby and Derrick Becker, LCD Group loan officer, anticipate demand will continue, if not accelerate, this year in advance of increasing interest rates.
“Interest rates are only going to go higher. If you are thinking about building, expanding, or making any major capital purchases, now is the time to apply,” advises Becker.
Click here for information about the SBA 504 Loan and contact Hruby at ashley@lcdgroup.org or at (701) 667-7607. Becker may be reached at derrick@lcdgroup.org or at (701) 667-7622.