SBA 504 Refinance Program

Refinancing commercial real estate debt is now a permanent feature of the SBA 504 Loan Program and can help small businesses take advantage of the low interest rates.

Below are some of the program highlights.

Eligibility Guidelines:

  • Ability to refinance one or more commercial loans;
  • The loan to be refinanced must be at least 24 months old and in good standing for the last 12 months;
  • Business must be operating for 2 or more years;
  • No full or partial ownership changes 2 years prior to date of application;
  • Appraisal is not required to submit refinance application, but will be a condition of funding;
  • Business must be at 51% occupancy at the time of application submission.

Loan to Value:

  • Maximum refinance LTV—90% of the value of collateral pledged for existing mortgage or secured debts; Cross collateralization of other fixed assets is allowed to get to 90%;
  • Maximum refinance LTV—75% of the value of collateral pledged when mortgage refinance request also includes “Eligible Business Expenses” – The aggregate amount of eligible expenses cannot exceed 25% LTV.

Borrower Benefits:

  • Up to 90% financing;
  • Longer Loan Term— Up to 20 years;
  • Fixed Interest Rate for entire term of loan

Lender Benefits:

  • Minimize risk—banks can limit their exposure to 50% of total 504 loan;
  • Free up client’s capital;
  • Combined LTV (1st and 2nd mortgage) up to 90%.