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