By Chris Shaheen, Development Specialist for Saurage Commercial Real Estate. 

Have you heard about the new 504 program being touted by the Obama administration?  It is a new program designed to increase loans to small businesses. It also includes lending for the acquisition and improvement of commercial real estate. It is funded through the repayment of TARP funds by the banks to a tune of $30 billion. There are restrictions on up front fees by the lenders and reasonable rates in the upper six percent range. The only requirement is that part or all of the building is occupied by the buyer for their business.  Now this all looks great and as a commercial specialist, I am tempted to run with it. There is just one problem: when the TARP was passed, the money we loaned to the banks was borrowed money that added to the national debt. By law, it is required that the repayment of the TARP money go directly to pay down that debt. They have changed their mind; forgotten about the law.  I am all for helping to lend money to small businesses so they can grow and I can continue to make a living but what is the effect of all of this debt that will continue to drag down the economy. What will happen to all of the loans being made under the auspice of being affordable?  Is this just another bubble waiting to burst? I know there are a lot of businesses that would love to take advantage of a program like this including me, but at what cost?  Where will all the customers come from in an economy strapped by high debt and high taxes to pay it off?  As usual, caught between a rock and a hard place.

Chris Shaheen is a graduate of Louisiana State University where he obtained a Bachelor of Science in Business Management.  Shaheen obtained the Louisiana Real Estate Sales License in 1995 where he began work as a consultant with Saurage Company Inc. as a specialist in development, land valuation, and financing.Saurage Company, Inc dba Saurage Commercial Real Estate was founded in Baton Rouge in 1991 with the purpose of providing exceptional real estate services with an emphasis on commercial property and property management.  Saurage Commercial Real Estate offers to its clients a full range of real estate services including brokerage, investment advising, development consulting, REO disposition specialists, asset management, fee based consulting, tenant representation, and buyer representation.  The staff of professionals includes combined experience of 50 years, as well as CCIM Designees and Candidates and recipients of Master of Business Administration.