Makeover Magic
The SBA may give its underused 504 loan program a face lift. How will that help you?
Considering how tough it is for entrepreneurs to findinexpensive financing, you would think the purses ofgovernment-subsidized programs would be routinely raided. Yet theSBA's 504 Certified Development Company Program--which awardsbelow-market, fixed-rate loans to small businesses for real estateand heavy equipment purchases--has been underutilized every yearsince 1996. In fiscal 2002, for example, Congress authorized $5.4billion for the 504 program, but less than half, $2.5 billion, wasactually used for approved loans.
That has the SBA scratching its head. "This is aonce-in-a-generation opportunity to lock in rates on a 20-year 504loan at somewhere around 6 [percent]," says Jim Hammersley,director of loan programs for the SBA. "With rates as low as they are, morepeople should be taking advantage of that."
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