SBA Loans

Due to the economic downturn and falling real estate values, many small businesses have encountered difficulty refinancing their maturing mortgages. The higher SBA loan limits and new commercial refinance program will provide credit relief for property owners and help stabilize the commercial real estate and small business sectors.

Also, real estate agents seeking access to scarce capital may now apply for SBA-backed loans after some SBA lenders were advising agents they were not eligible. In addition, if your small business suffers substantial economic injury, regardless of physical damage, as a result of a disaster, you may be eligible for financial assistance from the SBA. Small businesses and small agricultural cooperatives that have suffered substantial economic injury resulting from a physical disaster or an agricultural production disaster designated by the Secretary of Agriculture may be eligible for the SBA's Economic Injury Disaster Loan Program.

Political Advocacy

Current Legislation/Regulation

None at this time.


In-Depth

Find NAR's letters, testimonies, bill updates, and more on the NAR Federal Issues Tracker


Legislative Contact(s):

Daniel Blair,
dblair@realtors.org
202-383-1089

Regulatory Contact(s):

Stephanie Spear,
sspear@realtors.org
202-383-1018

What is the fundamental issue?

On February 17, 2011, the U.S. Small Business Administration (SBA) announced that it will start accepting refinancing applications for commercial real estate mortgages maturing by the end of 2012. For the first time, small businesses will be allowed to refinance certain owner-occupied commercial real estate mortgages into long-term, fixed rate loans. Last September, President Obama signed into law the Small Business Jobs and Credit Act of 2010, which authorized this program through Sept. 27, 2012.  This legislation also permanently raised loan limits from $2 million to $5 million for SBA 7(a) loans and from $1.5 million to $5.5 million for SBA 504 loans.

NAR also secured a regulatory victory in 2009 by obtaining from the SBA, written confirmation that real estate agents are eligible for SBA-backed loans. This follows a 2005 regulatory victory where NAR convinced the SBA to revise the eligibility criteria for the Economic Injury Disaster Loan program which will allow real estate agents to participate in that program. NAR’s regulatory actions were taken to help agents improve their access to capital during the economic downturn, and to assist the thousands of real estate practitioners whose livelihoods were impaired by Hurricanes Katrina and Rita, as well as those real estate professionals who may be impacted by future federally-declared disasters.

I am a real estate professional. What does this mean for my business?

Due to the economic downturn and falling real estate values, many small businesses have encountered difficulty refinancing their maturing mortgages. The higher SBA loan limits and new commercial refinance program will provide credit relief for property owners and help stabilize the commercial real estate and small business sectors.

Also, real estate agents seeking access to scarce capital may now apply for SBA-backed loans after some SBA lenders were advising agents they were not eligible. In addition, if your small business suffers substantial economic injury, regardless of physical damage, as a result of a disaster, you may be eligible for financial assistance from the SBA. Small businesses and small agricultural cooperatives that have suffered substantial economic injury resulting from a physical disaster or an agricultural production disaster designated by the Secretary of Agriculture may be eligible for the SBA's Economic Injury Disaster Loan Program.

NAR Policy:

NAR seeks to maintain small business access to SBA loan programs as a viable financing option, especially during economic downturns.  NAR also supports disaster loan policies that work to the benefit of REALTORS®.

Legislative/Regulatory Status/Outlook

On April 4, 2011, the U.S. Small Business Administration (SBA) expanded its temporary 504 commercial real estate refinance program to assist more small business owners struggling to refinance commercial loans. This new refinancing option was initially restricted to small businesses with commercial real estate mortgages maturing by the end of 2012, but now small businesses will be allowed to refinance certain owner-occupied commercial real estate loans maturing after Dec. 31, 2012.  Last September, President Obama signed into law the Small Business Jobs and Credit Act of 2010, which authorized this program through September 27, 2012.

NAR Committee:

Business Issues Policy Committee

Advertisement

Young Professionals Network

YPN helps young real estate practitioners become more business savvy through networking events, communications, and sharing tips and tricks.

Tax Reform

NAR seeks to assure that tax reforms support the goals of homeownership and freedom to buy, maintain and sell real estate.