1 NAR, May 16, 2012 TEMPORARAY 504 DEBT REFINANCING LOAN PROGRAM SMALL BUSINESS JOBS ACT of 2010

2 Agenda Temporary 504 Debt Refinance Loan Program Permanent 504 Loan Program –Basic Program –Permanent 504 Refi Program 504 Portfolio: 56,677 loans, $23.8 B in 504 loans; $53.5 B in total project financing outstanding! Today’s Program

3 TEMPORARY 504 DEBT REFINANCE LOAN PROGRAM What is it for? To refinance owner-occupied commercial property and equipment (not already government guaranteed) –Debt must be at least two years old –Can finance up to 90% of current appraised value –With sufficient equity, other businesses expenses and debt can be financed

4 Works like regular 504 Equity in other fixed assets can be pledged to increase the financing Lock in long-term, low fixed-rate financing for working capital as well as real estate (about 5% or less) Must be current (on agreed upon terms the past 12 months TEMPORARY 504 DEBT REFINANCE LOAN PROGRAM (CONT’D) Expires September 27, 2012

5 Refinancing Using Equity in the Property Appraised Value of Property $1,400,000 Outstanding Balance of Debt$1,260,000 90% LTV$1,260,000 First Mortgage Loan$700,000 SBA 504 Loan$560,000 Borrower Equity Contribution$140,000 EXAMPLE CASE STUDY #1 Borrower uses equity in property to lock in 44% of debt at long-term, low fixed-rates

6 Maximum Working Capital Appraised Value of Property $1,400,000 Outstanding Balance of Debt$1,000,000 90% LTV$1,260,000 First Mortgage Loan$700,000 SBA 504 Loan$560,000 Borrower Equity Contribution$140,000 Proceeds for Working Capital $260,000 EXAMPLE CASE STUDY #2 Borrower benefits from lower cost working capital and 44% of debt at long-term, low fixed-rates

7 Other Collateral Added to the Deal to Maximize SBA Debt Appraised Value of Property $ 800,000 Outstanding Balance of Debt $1,000,000 Appraised Value of Other Pledged Collateral $ 600,000 80% of Total LTV $1,120,000 First Mortgage Loan$560,000  SBA 504 Loan$560,000  Borrower Equity Contribution$280,000  Available for Working Capital $120,000 7 EXAMPLE CASE STUDY #3 Borrower gets: - 50% of their debt fixed - to refinance an underwater loan - working capital

8 Resources For more information about the Jobs Act 504 Debt Refinance Program contact: To find a SBA Certified Development Companies that service you area : Contact the nearest SBA SBA District Office Or: Linda Reilly, Financial Analyst