Small businesses that face maturing loans and possible default status on their commercial real estate could refinance their mortgages with a new loan from the U.S. Small Business Administration (SBA).

The SBA is making the refinancing loans available to help companies nationwide weather the storm of possible foreclosures because of the challenges of refinancing and restructuring their mortgage debt, even for small businesses that are performing well and making payments on time.

Borrowers will be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower, plus eligible refinancing costs.

The loans will at first only be available to businesses with immediate need for help, with priority going to companies potentially at risk because their loans are maturing or balloon payments are required before Dec. 31, 2012. The SBA will revisit the program requirements and may open it to businesses with later balloon payments or that can demonstrate further needs.

The program is structured like the SBA’s traditional 504 loan program. Borrowers will work with third-party lending institutions and SBA-approved Certified Development Cos., typically private, nonprofit organizations to obtain financing in a traditional, 10 percent/50 percent/40 percent split.

Applicants must demonstrate that their loans are current and that they have successfully made all required payments in the last year, and a new, independent appraisal will be required for all projects. The SBA will perform full and thorough underwriting on all refinancing applications so there are no delegated lenders.

The SBA is estimating as many as 20,000 small companies nationwide may participate in the program, which will provide up to $15 billion in SBA-guaranteed financing. The program, which is completely separate from SBA’s traditional 504 program, is zero-subsidy, requiring no cost to the taxpayer. It will be funded entirely through additional fees assessed for refinancing projects.

Initially, the first mortgage loans on existing 504 projects are not eligible, and "cash out" refinancings are not permitted, though the SBA may later revisit these restrictions. Additionally, no government guaranteed loan is eligible for this refinancing program.