OLD Debt Refinance Guide (Without Expansion)

There has never been a better time to refinance existing debt with the SBA 504 Loan Program!

  • Fixed-Interest Rates for the Life of the Loan
  • Cash Out – Provide needed liquidity for eligible business expenses
  • Improve Financial Institution’s LTV
  • Improve Borrower’s Cash Flow

Step 1: Basic Eligibility

  • Must be considered a Qualified Debt
  • Substantially all (75% or more) of the proceeds were used for 504 eligible purposes (To acquire land, land and building, construct a building, or purchase equipment)
  • Qualified debt must have been in place for at least 6 months prior to SBA application
  • Was incurred for the benefit of the small business
  • Has been secured by Eligible Fixed Assets for at least 6 months
  • May include debt subject to a federal guarantee, under certain conditions

    • If the loan being refinanced is guaranteed by a Federal agency other than SBA, the CDC must document in writing that the refinancing of the Federally-guaranteed loan is permissible under the other Federal agency’s requirements or is otherwise approved by the other Federal agency
    • If refinancing an existing 504 loan then TPL loan and 504 loan must be refinanced
    • Must notify existing CDC or 7(a) lender in advance of refi loan application submission to SBA (10 biz days)
  • Current on all payments due removed but still use prudent lending practices

      Applicant must be in operations for 2 years prior to refi

      Must meet 51% or more occupancy requirement at the time of SBA application.

    Step 2: Required Documentation*

    * In addition to standard 504 application items

        • Current note & lien/security instruments

      – demonstrate in place for minimum of 6 months

      Transcripts for prior 12 months or length of time debt has been in place if less than 12 months

      Documentation evidencing 75%/25% test

      Certification that all business line or credit card debt was used for Eligible Business Expenses, if applicable

      Substantial Benefits Test documentation – we can assist with this

      Itemization of Eligible Business Expenses, if applicable

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      Download our 504 Debt Refinance Guide