Skip to main

SBA 504 Refinance Program

Share this page:
Refinance

What is the SBA 504 Refinance Program?

Co-Lender financing designed to refinance existing commercial real estate or machinery/equipment debt with low, fixed interest rates at 10, 20, or 25-year terms.

Download the Insider's Guide

Benefits of the 504 Refinance Program

Benefits for Lenders

  1. 1st lien position and low loan-to-value strengthens private lender’s loan portfolio
  2. Fixed interest rate helps lenders compete for more business
  3. Locks in long-term relationship with the borrower and frees up available debt

Benefits for Borrowers

  1. Financing available up to 90% of the appraised value of the property being refinanced at a long-term, fixed-rate
  2. Equity contribution can be as little as 10% of the property’s value and can include equity in the property being refinanced.

Who Can Qualify?

  • Most for-profit, small businesses in the U.S.
  • Tangible net worth less than $20.0 million
  • Net profit after tax (2 year average) of no more than $6.5 million (including affiliates)
  • Businesses with at least two years of operations and whose debt is at least 6 months old (projects without expansion only).
  • Business must occupy at least 51% of its property at the time of application

Refinance Projects

Without Expansion

  1. Businesses may withdraw extra equity for the financing of 18 months of other Eligible Business Expenses (EBE). EBE and the debt refinance combined cannot exceed 90% LTV.
    Examples of eligible business expenses may include salaries, rent, utilities, inventory, and credit card debt (if the card is in the name of the business and used for business purposes only), and Other Secured Debt.
  2. Businesses may use an SBA 504 refinance loan to repay an existing government guaranteed loan
    Including SBA loans, USDA loans, etc.
  3. At least 75% of original proceeds must have been used for eligible fixed assets.
  4. The refinance must have documented benefit in the structuring of debt.

With Expansion

  1. Expansion costs must be equal to or greater than the amount of debt being refinanced.
  2. Substantially all (75% or more) of the proceeds of the refinanced debt was originally used for eligible fixed assets.

Interest Rate and Terms

  1. Fixed-Rate
    Based on Treasury Rates
  1. Real Estate
    May be 10, 20, or 25-year term
  1. Machinery & Equipment
    May be 10 or 20-year term (based on useful life)

Find Your Loan Officer Today!

Feel confident knowing we are the leading non-profit provider of small business financing. Our Loan Officers are experts and have been helping people fund their dreams since 1993.

See Our Loan Officers