Small businesses are given a lifeline from commercial mortgage debt
Many small businesses are feeling the pinch of commercial mortgage debts. It is a tough old world out there and the prospect of rising interest rates is never too far away. However, thanks to a new refinance program implemented by the CDC Small Business Finance and Small Business Administration, small businesses can now sleep at night without worrying about how they can get debt resolution now.
The global economy is on the way to recovery, but debt resolution is still a big issue for many small businesses. Debt strangles small businesses. Now, thanks to the new commercial mortgage debt-refinancing program, eligible small businesses have the breathing space they need and the room to grow.
Real Estate Debt in the U.S. Soaring
Current figures suggest that real estate debt in the U.S. is $100-200 billion. Much of the debt is owned by a wide range of small businesses, many of whom are still struggling to make a profit, despite the passage of time since the last major recession. A lot of small businesses are dragged down by high-interest debt, which prevents them from growing their companies and hiring new staff. It is a toxic situation, which is bad for small business owners and bad for the US economy.
SBA-504 Debt Refinance Program
The new debt refinance program is a reprisal of an old one, which was set up to help small businesses at the height of the recession in 2011-12. The SBA-504 program allows small businesses to take advantage of new refinancing deals, so rather than being stuck with high interest or a huge balloon payment on a real estate debt they can restructure their debt and spread the payments over 20 years at a lower rate.
The new repayments will be fixed for the duration of the arrangement, so businesses do not have to worry about rising repayments. This helps cash flow and makes it easier to manage the everyday financials of running a small business. Any small businesses that think they might need help with their debt management can talk to a Small Business Finance expert to find out if they are eligible for the scheme.
What is CDC Small Business Finance?
CDC Small Business Finance is run as a not-for-profit organization, so it exists purely to help small businesses manage their debt. The organization provides capital to help small businesses based in Nevada, Arizona and California to grow and flourish. They can provide working capital to help businesses purchase equipment, tools, and make real estate improvements. Since its inception 38 years ago, CDC Small Business Finance has leveraged more than $12 billion in business loans and helped a staggering 10,000 small businesses in the process.
If your small business is struggling to keep up with commercial mortgage debt repayments, you need help. Talk to a small business advisor or financial counsellor to see what avenues are open to you. There is always help available, but you may have to go looking for it.