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Our National Association recently shared that when President Biden released his budget blueprint for FY 2024, it included significant advancements for the 504 program.
OUR VOICE WAS HEARD!
The budget includes the combined cap language that our industry has been pushing for! What does this mean?
The 504 program has seen a lot of growth in the past few years, which is great; however, it has also come with some growing pains regarding lending limits. In fact, in FY 2021, because so many projects were approved, we hit the lending cap toward the end of the fiscal year, and SBA was forced to stop approving applications. Luckily, SBA was able to start approving loans a couple of weeks later when the new fiscal year started, but it is a situation our industry would never like to be in again. Therefore, in an effort to avoid this problem moving forward, the CDC industry and our trade association, NADCO, came together to advocate for a higher cap or authorized limit so our small businesses are never in this predicament again.
AUTHORIZATION CAP INCREASE
Since 2016, with the introduction of the 504 debt refinance without expansion program, there have been two separate caps, one for the traditional program and one for the refi expansion program, So, the first focus has been to combine the caps into one large cap, and we are pleased to announce the President’s bill allows for an increase of the cap to $16.5 billion for all 504 programs, which is an increase of $1.5 billion.
ZER0 SUBSIDY PROGRAM
Due to the strength of the overall national 504 loan portfolio, the 504 program will remain a zero subsidy program. This means the program will continue to serve borrowers at no cost to the taxpayers.
WHAT HAPPENS NEXT?
The President’s budget release kicks off the appropriations process for FY 2024 on the Hill, and our trade association, NADCO, will be there to continue advocating for retaining the 504 combined cap in the FY 2024 appropriations bill.
We will continue to keep you updated on any new developments.
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