SBA 504 Refinance Program Made Permanent!
SBA 504 Debt Refinancing Program
The SBA 504 refinancing program, which began as a temporary solution as part of the Small Business Jobs Act of 2010, is now a permanent offering. As of May 2016, the refinancing program became a permanent fixture.
As part of this Consolidated Appropriations Act of 2016, the SBA 504 refinancing program is only available as an option in fiscal years where the subsidy costs to the government is at zero.
When this occurs, the U.S. Small Business Administration is authorized to approve up to $7.5 billion in regular SBA 504 loans and $7.5 billion in lending authority for SBA 504 debt refinancing.
Applications for refinancing are being accepted now. So, how can you take advantage of the SBA 504 debt refinancing program?
SBA 504 Debt Refinancing Program
The refinancing option for the SBA 504 works similar to a typical 504 loan, which generally consists of the following elements:
A loan secured from a private-sector lender covering 50% of the costs of your project
A second mortgage or loan from an SBA-certified development company covering up to 40% of the costs of your project, and
A down payment from you of at least 10%
For the 504 debt refinancing program, the borrower must be able to refinance up to 90% of the appraised value of the property. Here are more details on how the refinancing program works:
Up to 90% loan to value for single purpose or special use properties such as hotels
Up to 90% loan to value if the refinance includes real estate or equipment debt
Eligible business operating expenses can be covered for the program for up to 75% loan to value
SBA 504 Refinancing Eligibility
So, now that you know how the refinancing program works, the next step is to determine if you are eligible to refinance under this loan program.
Here are the eligibility requirements as stated by the Small Business Administration:
The debt to be refinanced must be from a commercial loan
The proceeds from your original loan were used to acquire 504 eligible assets such as real estate, land, and equipment
75% of the original debt must have been used to finance real estate
Your business must have been in operation at least two years prior to the date of your application (excluding ownership changes)
The debt must be in place at least two years from the date of your application
The loan to be refinanced must be current for the last 12 months
Debt from SBA 7a, SBA 504, USDA, or any other government loans are not eligible to be refinanced under this program.
This can be a confusing process, so it is important that you speak to an experienced professional about your options before you apply for refinancing under the SBA 504 program.
Speak to the Experts at SBA Expert about Refinancing Today If your project left you with debt and you want to refinance, you may want to take advantage of the SBA 504 refinancing program. The Small Business Administration is authorized to hand out $7.5 billion in debt refinancing loans. Our loan officers at SBA Expert can help you take advantage of this today.
To find out if you’re eligible for the SBA 504 refinancing program, contact SBA Expert today. We can work with you to find out if you are eligible and guide you through the complicated application process. Our professionals have a wealth of experience in the industry, and we will use this to your advantage.
If you’re interested in SBA 504 refinancing loans, call SBA Expert today at 949-439-1423. Our experts are here to help you.