SBA Information Notice: Form 1244 updates to conform to Economic Aid Act and Interim Final Rule on 504 Debt Refinancing
Summary
SBA Information Notice, control no. 5000-809115, effective July 29, 2021, addressed to SBA employees and Certified Development Companies, announcing revisions to SBA Form 1244, Application for Section 504 Loans. The changes conform the form to the debt refinancing options in the 504 Loan Program created by section 328(a) of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, enacted December 27, 2020, and to SBA's interim final rule in the Federal Register of July 29, 2021. Besides updating the Statements Required by Law and Executive Order, SBA revised or added questions on debt refinancing with expansion that bear on processing by PCLP CDCs under delegated authority.
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Full text
SBA Information Notice
TO: All SBA Employees and Certified CONTROL NO.: 5000-809115
Development Companies
EFFECTIVE: July 29, 2021
SUBJECT: Form 1244 updates to conform to
Economic Aid Act and Interim Final Rule on 504
Debt Refinancing
The purpose of this Notice is to announce the revisions that have been made to SBA Form 1244,
Application for Section 504 Loans, to conform the form to changes made to the debt refinancing
options available in the 504 Loan Program by section 328(a) of the Economic Aid to Hard-Hit
Small Businesses, Nonprofits, and Venues Act, enacted December 27, 2020, Public Law 116-
260, and the interim final rule that SBA published in the Federal Register Vol 86, No. 143,
Thursday July 29, 2021. In addition to making some updates and revisions to the Statements
Required by Law and Executive Order, the changes to the form include the following:
1. With respect to debt refinancing with expansion, SBA revised or added the following
questions on page 12 that are relevant in determining whether the loan may be processed by
PCLP CDCs under their delegated authority:
“1. Does the Applicant project involve debt refinancing? ☐ Yes ☐ No
If yes, with or without expansion? ☐ With expansion ☐ Without expansion
(a) If debt refinancing with expansion:
• Is the debt being refinanced the debt of the CDC or the TPL, or of
affiliates of either? ☐ Yes ☐ No
• Is the CDC requesting an exception to the requirement that the new
installment payment be at least 10% less than the existing installment
amount(s)? ☐ Yes ☐ No
• Is the CDC requesting a waiver of the requirement that the 504 eligible
fixed assets collateralizing any debt to be refinanced (or relating the
portion of debt being refinanced in the case of partial refinance) also
collateralize the 504 Loan? ☐ Yes ☐ No
If the answer to any of the questions in 1(a) above is “yes”, then the application must be
processed through SLPC and not through the PCLP CDC’s delegated authority.”
PAGE 1 of 2 EXPIRES: 7/1/22
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
2. With respect to debt refinancing without expansion, SBA removed the following sentence on
page 12: “If debt refinancing without expansion, the application must be processed through
SLPC and not through PCLP authority.” SBA also added the following questions that are
relevant in determining whether the loan may be processed by PCLP CDCs under their
delegated authority:
“(b) If debt refinancing without expansion:
• Is the debt being refinanced the debt of the CDC or the TPL, or of
affiliates of either? ☐ Yes ☐ No
• If the debt being refinanced is subject to a guarantee by a Federal
Agency, is the CDC requesting an exception to the requirement
that the new installment payment be at least 10% less than the
amount(s) of the existing installment? ☐ Yes ☐ No
If “yes”, then the application must be processed through SLPC and not through the PCLP CDC’s
delegated authority.”
3. SBA added the following question under question #10 regarding the alternate job goal on page
14:
“If no, is the project eligible under the 504 debt refinance alternative job goal? ☐ Yes ☐ No”
4. With the change made by the Economic Aid Act that a debt may be eligible for refinancing if
it was incurred not less than 6 months before the date of the application instead of 2 years
before application, SBA removed on page 18 the following phrase from the documents that
must be submitted as part of Exhibit 20: “if the debt was previously refinanced within two
years of the date of application, copies of the most current debt and lien instruments as well
as copies of the debt and lien instruments for the debt that was replaced by the most current
debt.”
5. In describing the Project Funding Sources and Uses under question #8 on page 13, SBA added
a separate line for “Land Only Purchase”. In addition, in describing the economic
development objectives that are met by the Project under question #12 on page 14, SBA
added references to “Base Closures” and “Minority-Owned Business”.
Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office.
Dianna Seaborn
Director
Office of Financial Assistance
PAGE 2 of 2 EXPIRES: 7/1/22
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
File and source
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- 2021-08_Info-Notice-5000-809115-Form-1244-with-Debt-Refi-Economic-Aid-Act-Updates-508.pdf
- Size
- 113,637 bytes
- SHA-256
- 3bec9fd263c9ee080454b3cb7d82bb0670f50a3194955b0aafe0e9377fa7d460
- Original
- www.sba.gov