New Rules Make Refinancing Easier For Companies

: Chris Lee Law Firm

  Filed under: Financial News

mortgage refinancingCommercial mortgages aren’t immune to the effects the economy has had on real estate. Many businesses are holding onto mortgages for dear life in hopes of weathering the economic storm. However, as property values have declined and foreclosure numbers peaked even large companies are looking for ways to lower mortgage costs.

 

The 504 Program

Mortgage debt relief options do not come easy for businesses. Commercial mortgages face many unique challenges not encountered by residential property owners. Often times, refinancing a commercial property loan is difficult and can be highly dependent on the financial status of the company. In other words, commercial loan lenders are less willing to approve a mortgage refinance for businesses with financial problems, leaving only those in good financial standing eligible for mortgage relief.

The Small Business Jobs Act has implemented a temporary program to allow small businesses to refinance. The program is designed to help businesses lock in long-term financing and protect assets, which will protect more jobs and free up cash for hiring additional employees. Previously, businesses were only eligible if the mortgage was over 5 years old and a third party lender was willing to fund 50 percent of the refinanced loan. The program’s new rules allow for commercial mortgages over 2 years of age to qualify and the third party lender restriction has been removed. Businesses have until September 27, 2012 to take part in this program.

 

 


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