The U.S. Small Business Administration has launched a temporary program aimed at helping small business owners with commercial mortgages.

Small business owners who have balloon payments for commercial mortgages before Dec. 31, 2012, may be able to refinance their mortgage debt with a 504 loan.

Structured like the SBA’s traditional 504, the loan requires borrowers to commit at least 10-percent equity and work with third-party lending institutions and SBA-approved certified development companies.  A key feature of the new program is that it does not require an expansion of the business in order to qualify.

On Feb. 28, the SBA will begin accepting refinancing applications. Authorized under the Small Business Jobs Act, the program will be in effect through Sept. 27, 2012.

“The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years,” said SBA Administrator Karen Mills.

“As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs.”

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Borrowers will be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower.

Up to $15 billion in loans – split between fiscal 2011 and fiscal 2012 – has been authorized by Congress.

The SBA expects this program to benefit as many as 20,000 businesses.

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