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CREED Act to Help Small Business Owners

Now that a permanent 504 debt refinancing program is official, small business owners will have better opportunities for growth and prosperity. The CREED (Commercial Real Estate and Economic Development) Act, S. 966 is a bill that has been approved to re-institute debt refinancing using the 504 program.

The CREED Act was reintroduced by Rep. Judy Chu back in Spring of 2015 to help small businesses gain more access to capital by extending the SBA’s 504 refinancing program. According to Rep. Chu:

“Small businesses account for two out of every three jobs that are created. Which means that the best way to cement the gains of the still fragile economy recover is to put more capital in the hands of those job creators. And that is exactly what this bill will do. While small businesses continue to face challenges with unreasonable real estate loans, this bill allows businesses to take advantage of low interest rates by refinancing existing loans and locking in long-term, fixed-rate financing so that they can create jobs and boost economic growth. All at zero cost to the taxpayers! This is a smart, bipartisan policy that works, but it has not been reauthorized since the 2012 trial year. At that time, over 2,700 businesses refinanced nearly $7 billion in old, expensive debt. Extending the program for another five years would help an additional 250,000 small businesses, saving each of them up to $20,000 per month.”

The 504 Loan Refinancing Program allows small business owners to refinance their eligible fixed assets, including commercial property. It involves pairing conventional loans with government-guaranteed loans, enabling small businesses to lock in stable, long-term financing. This program was originally enacted in 2011, but had expired in September of 2012.

According to Claire O’Rouke, Vice President of Government Relations for the National Association of Development Companies (NADCO), it is still uncertain when the program will officially be available to small business owners waiting on the SBA’s upcoming regulations. Industry experts believe the program may be available as early as June of this year, despite the complicated regulatory process.

To find out more information about the CREED Act and how NEDCO can help your small business to secure refinancing, contact our experienced professionals today.

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