Note: Since this article was posted, a long-term funding bill has been signed that keeps the government running for the rest of fiscal year 2022, retaining the authorization levels for the SBA 504 program that are necessary to keep the program running.
“The Small Business Administration’s 504 loan program may once again become a victim of its own success…”
So begins a recent article by reporter John Reosti for American Banker Magazine, in which Seedcopa Managing Director Sherwood Robbins is interviewed. John contacted Seedcopa after seeing our series of blog posts from last fall announcing that the SBA 504 lending cap was reached, outlining how this happened, and describing the effects.
Reosti writes in American Banker, “Last year, the 504 program, which provides small businesses with long-term financing to purchase commercial real estate and heavy equipment, reached its lending limit in early September, forcing it to shut down until the start of the federal government’s 2022 fiscal year on Oct. 1. This year, it’s on pace to exhaust its lending authority ‘as early as June,’ more than three months before the 2022 fiscal year ends, according to Rhonda Pointon, president and CEO of the National Association of Development Companies, a Washington-based trade group representing certified development companies active in 504 lending.”
In the article, Seedcopa’s Sherwood Robbins says the 504 program’s profile has been raised through a combination of low interest rates along with its extended durations and competitive loan terms. He comments, “As always, we stay optimistic that Congress recognizes the importance of the SBA 504 program and will take action to prevent any interruption.”
Robbins is Director of Region 3 for the National Association of Development Companies (NADCO), covering five states and the District of Columbia. NADCO’s mission is “to work with Congress to ensure small businesses have uninterrupted access to the capital that they need.”
Robbins comments that the situation “is especially concerning, given the amount of time the program could potentially be unavailable for small businesses during an economically uncertain time.”
Read: “SBA’s 504 loan program could be headed for a second shutdown” in American Banker Magazine
