Business Financing Program
SBA 504 Refinance Opportunity
SBA 504 Announces Refinance
The Small Business Administration recently announced the new commercial loan refinance opportunity available through the SBA 504 program. The 2010 Small Business Jobs Act authorized the 504 program to temporarily allow qualified commercial real estate and equipment refinancing without business expansion.
Eligibility
- This temporary program is for debt refinancing only.
- 85% or more of the proceeds of the loan being refinanced
must have been used for 504 eligible purposes, such as land,
buildings and equipment.
2011 Changes & Refinance
 Click here to view the slides from the April 12, 2011 seminar.
Click here to read about SBA 504 changes, temporary Refinancing option, FAQs and Myths Debunked in EDC's newsletter. |
- Loans being refinanced must have been current for the past year with no payment being deferred or past due for more than 30 days.
- Debt must have been incurred not less than two (2) years prior to the date the application is received by SBA.
- The borrower is asked to show that they currently have one full-time job or full-time equivalent job per $65,000 borrowed through the debenture.
- The Third Party bank loan and the 504 loan combined may
not exceed 90% of the loan to appraised value of the fixed
assets securing the loan.
Borrower's Contribution
- The Borrower’s 10% contribution may be satisfied by its equity in the Eligible Fixed Asset(s).
Timing
- Borrower must close and fund the SBA 504 refinance debenture within six (6) months of loan approval.
Changes effective October 2011
- "Cash-out" financing for business expenses is now permitted
- Bank first mortgage no longer is required to be 50% of appraisal amount
- Eligible refinance time period is based on the original note date and not the date of a recent refinance
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