It’s estimated that there are roughly 3.7 million Black-owned businesses in the United States today. Entrepreneurship is high in our community, but getting access to startup funding isn’t. But that may be changing.
The Small Business Administration (SBA) has kept a tight leash on lending and refinancing, especially as interest rates have been at record highs over the past few years. Now, the SBA is easing the restrictions on its 504 loan program for small businesses.
Any small business that makes under $20 million annually and needs to refinance its loans through the SBA’s 504 loan program can now do so more easily. Thanks to lower interest rates, the SBA has increased the loan-to-value ratio up to 90%. This means that borrowers can increase the amount they need to borrow to refinance.
The SBA also removed the 20% cap on “eligible” business expenses and expanded what debt can be included in refinancing. Simply put, the SBA has made it easier for Black-owned businesses to refinance and restructure.
The Small Business Administration exists to help entrepreneurs not only get their businesses off the ground but also keep them afloat. With the changes they’ve made, Black businesses needing restructuring and financial help now have a smoother road to travel.