The Partnership for Small Business Relief, including Liberty SBF Holdings LLC, a small business finance company, is calling on Congress to enhance the SBA 504 Loan Program, which will provide a way to get much-needed capital into the hands of business owners in industries most impacted by the COVID-19 pandemic and resulting economic disruption, preserving jobs, stimulating spending, and putting the economy on a long-term path to recovery, all at zero cost to taxpayers.

Small businesses across the country are continuing to struggle due to the pandemic, and Congress has an opportunity to provide business owners with immediate access to capital by making a few simple refinements to the SBA 504 Loan Program. These small enhancements will accelerate economic recovery for small businesses in industries that have been most affected by the pandemic across the country.

The Partnership for Small Business Relief consists of SBA lenders, Certified Development Companies (CDCs) and small business borrowers who believe that the SBA 504 Loan Program can play a significant role in stimulating the economy and further preserve jobs at extremely favorable terms for owners who operate from their own commercial properties. Industries most affected by the economic fallout from the pandemic, including healthcare, hotel and service-oriented businesses, have historically been primary users of the SBA 504 Loan Program and will benefit the most.

The Partnership believes that the small enhancements it seeks will provide $100 billion in funding to small businesses and is lobbying Congress for the following two provisions for the current SBA 504 Loan Program:

Reinstate the First Mortgage Loan Pooling (FMLP) Program, which provides an 80% government guarantee on SBA 504 first lien mortgages and will provide much-needed liquidity in the commercial lending marketplace.

Enhance the SBA 504 Refinance Program and allow greater flexibility for modifications of existing 504 loans.

With long-term financing essentially frozen for the most vulnerable small businesses as a result of the pandemic, delivering immediate and significant capital to those who have been adversely affected by this national emergency will allow them to tap the existing equity in their properties for immediate cash to protect payroll, fund essential business operations, and consolidate existing high-priced, short-term debt.

FMLP is a turnkey program and was successfully implemented during the last recession – providing a path forward for the small businesses who are most affected by this crisis. Reinstating FMLP is important as it will help add liquidity to the lending market for small businesses. Amending regulations to allow an 80% SBA guarantee on SBA 504 first lien loans ensures there is a secondary market so lenders can continue to fund more small business commercial property loans and enable business owners to take advantage of historically low interest rates.

“Re-establishing the FMLP is the quickest and most efficient way to support the proven success of the SBA 504 Loan Program and help U.S. small businesses thrive without burdening taxpayers,” says Alexander Cohen, CEO of Liberty SBF. “There is now almost 10 years of pay history on the original FMLP bonds showing very strong performance.”

FMLP does not require a funding subsidy from U.S. taxpayers. In fact, the program actually generated $15.6 million in positive P&L for the U.S. government [source: Government Loan Solutions] during the 10 years of bond performance after it was first enacted in 2009. Additionally, FMLP has an existing statutory playbook that was perfected during the last recovery cycle and most importantly, a track record of success for helping small business. During its first iteration, FMLP guaranteed almost $1 billion in 504 total financing for small business owners.

The U.S. House of Representatives and Senate are currently negotiating the next round of stimulus legislation to help support small business in the wake of the economic shutdown caused by COVID-19. Borrowers, CDCs or lenders interested in adding their voice to the hundreds of Partnership members calling for these critically important measures should visit to receive more information and add their name.

“Congress is considering the next stimulus package and we believe SBA 504 and FMLP should play a big role,” adds Cohen. “During the last recovery cycle SBA 504 and FMLP made a huge impact by providing capital to small businesses at no cost to taxpayers.”

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