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New Debt Refinance Program Could Help Small Businesses

A new SBA debt refinance program arranged by Pinnacle Bank of Gilroy and CDC Small Business Finance offers lower interest rates using a SBA-504 loan, which allows qualifying small businesses to purchase and refinance commercial property.

US Technical Ceramics (USTC), a Morgan Hill based manufacturer of structural ceramics for a variety of industries, announced it recently closed a $3 million commercial loan using a new SBA debt refinance program arranged by Pinnacle Bank of Gilroy and CDC Small Business Finance.

The new financing allowed USTC to take advantage of current low interest rates using a SBA-504 loan, which allows small businesses to purchase and refinance commercial property. The company is saving $68,000 a month, which will be reinvested in new equipment to make USTC more competitive.

“The SBA-504 refinance program came at the right time,” said Walt Carbonell, president of USTC, which currently employs 32 people. “We were facing a significant balloon payment with our old loan. The refi offered a fixed rate over 20 years. It gives us more financial flexibility and allows us to allocate more dollars to initiative that will help the company grow and create new jobs.”

Small businesses need to own their company facility to be eligible for the SBA-504 refinance loan. The loan has a unique structure. A bank or other lender provides 50 percent of the refinance cost, the government-guaranteed SBA-504 loan provides 40 percent and the small business owner is contributes 10 percent.

“Small business owners who currently own their own building and are facing an imminent balloon payment on existing financing can really benefit from this program,” said Tony Marandos, senior vice president with Pinnacle Bank. 

Kelly Ryan, CDC Small Business Finance loan officer, said the SBA-504 refinance program is “gaining traction with small business owners but they need to act soon.” 

The program is set to expire Sept. 27.

josephzmccombs April 27, 2012 at 06:07 AM
It pays to shop around for a mortgage refinance. Mortgage rates have gone down like anything. My brother in law just got a 30-year fixed loan at 3.76% He told me search online for 123 Refinance for the lowest rate.

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