Small Business Administration (SBA) 504 loan recipients will benefit from the elimination of most up-front program fees for at least another month, thanks to a move yesterday by the U.S. Senate.

The temporary extension, which expires on March 28, eliminates both the bank participation fee of 0.5% and the certified development company (CDC) processing fee of 1.5%.

This is again great news for small business owners looking to purchase owner-occupied commercial real estate and/or long-life machinery and equipment through the 504 loan program.  The fee relief will save borrowers approximately $10,000 in upfront, out-of-pocket costs on a typical loan.

A longer extension is currently in the works in Congress as part of the Jobs Bill, which contains an additional $354 million to extend the program fee eliminations through Sept. 30, 2010. That bill also contains provisions that would increase the cap on 504 loans (SBA portion) to $5 million for standard small businesses and $5.5 million for small manufacturing businesses as well as allow for the refinancing of owner-occupied commercial real estate loans under the 504 program.

If the Jobs Bill does not pass by March 28, lenders can expect the SBA to re-activate its Recovery Act Loan Queue, as it has done twice previously.  Once this occurs, loans are placed into the queue awaiting the availability of funds.

According to the SBA, program enhancements thus far have accounted for an additional $18.2 billion in lending to more than 40,000 small businesses with small businesses reporting that the provisions will save or create more than 500,000 jobs.

For more information about 504 loans in Florida, contact Florida First Capital by visiting www.ffcfc.com, emailing us at insider@ffcfc.com or calling 888.320.5504.