ISSUE ALERT: WORKING TO INCLUDE KEY SBA 504 PROVISIONS IN THE CARES ACT
It is a critical time for the SBA 504 industry as the Coronavirus Aid, Relief and Economic Security Act (CARES) Act and other legislation is rolled out by Congress. We are advocating for specific SBA 504 provisions to be included, including the reinstatement of the First Mortgage Loan Pool (FMLP) Program.
We must encourage NADCO and members of Congress to include these provisions for SBA 504 into their plan to help small businesses during the COVID-19 crisis.
The Action Alert that we are asking you to respond to today is focused on these provisions which are of vital importance to the small business community. We want to ensure that these critical additions are in the version that is signed into law.
If Congress enacts all of the below outlined SBA 504 provisions, we can immediately begin deploying funds to the most affected industries, including hard hit small business sectors such as hospitality, food service, and retail and we can quickly deploy these funds.
We ask that anyone who has a stake in the SBA 504 program to coordinate an effort to push for these SBA 504 provisions in their entirety:
- Increase the maximum SBA Debenture loan size from $5 Million to $10 Million.
- Expand breadth of the SBA 504 Refinance Program (Allow borrowers to tap equity in their properties for cash.)
- Allow for expanded re-subordination for existing 504 loans (Allow borrowers to tap equity in their properties for cash.)
- Reintroduce FMLP (85% SBA guarantees on SBA 504 first mortgages.)
All of these provisions can be implemented immediately and only in their entirety can the SBA 504 program provide liquidity to businesses hit hardest by COVID-19.
Call to Action for FMLP 2.0!
NADCO also needs to hear from CDCs and Third-Party Lenders that reinstating FMLP (a successful crisis era program with an established playbook and proven track record of success) is essential to bring liquidity to the SBA 504 program. FMLP will facilitate immediate and much-needed liquidity to struggling small businesses like hotels, restaurants, childcare facilities, and health care.
The private credit markets are currently shuttered due to Covid-19! The lack of liquidity in conventional loan markets will negatively impact SBA 504 volume and eviscerate current closing pipelines unless the SBA 504 community acts swiftly and decisively. The FMLP guarantee program will help Third-Party Lenders fund small business commercial property loans. Without third-party lenders the SBA 504 program ceases to exist.
We implore everyone to act now!
We need to let NADCO and members of Congress in the House and Senate — Republicans and Democrats alike — that this bill is critical for small businesses!
Below are actions you can take RIGHT NOW to help get these important SBA 504 Provisions into the CARE Act:
- FAQ/Primer on FMLP [Download PDF]
- Contact NADCO and let them know we need to reinstate it FMLP [Link to NADCO website]
- Playbook and content to reach out to Congress [Download PDF]
- Memo outlining our position [Download PDF]
- Send Congress this letter
- Contact us to add your name to our petition to Congress
Thank you for helping in our campaign and for all you do for small businesses!