Arena Tow, an Elk Grove-based vehicle towing and storage company, announced it recently closed a $1 million commercial loan using a new SBA debt refinance program arranged by CDC Small Business Finance and Bank of America.
The new financing allowed Arena Tow 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 using the refinancing to streamline operations and hire four additional employees. They will also use available cash to support increased operating costs such as fuel.
“The SBA-504 refinance program came at the right time,” said Kevin Stewart, owner of Arena Tow. “We were facing a significant rate increase with our old loan. The refi offered a fixed rate over 20 years and helped our cash flow so we could allocate more dollars to growing the business and staying competitive.”
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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 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 Rick Woody, CDC Small Business Finance loan officer.
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Woody said the SBA-504 refinance program is “gaining traction with small business owners,” but those still interested need to act soon. The program is set to expire Sept.27.
More information:
Arena Tow –www.arenatow.com
CDC Small Business Finance – http://tiny.cc/SBA-504-Refi