Debt Refinance Guide

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

  • Record Low-Interest Rates
  • Cash Out – Provide needed liquidity for eligible business expenses
  • Improve Bank’s LTV
  • Improve Borrower’s Cash Flow
  • 90% LTV; equity serves as injection
  • Original debt incurred at least 6 months prior to the date of loan application
  • 85%+ of original use of proceeds for commercial real estate, equipment, and other FF&E
  • 100% incurred for the benefit of the business
  • NO change of ownership in business for past 2 years
  • Determination that refinancing the “Qualified Debt” will not cause a shift of loss to the SBA
  • Federally Guaranteed Debt (exisiting 504 loan or 7(a) loan) can be refinanced, as long as it is considered “Qualified Debt”
  • Business occupies 51%+ of commercial real estate
  • Current note & lien/security instruments
  • A copy of the transcript of account (or equivalent) for the qualified debt, to determine that refinancing will not cause a shift of loss to the SBA
  • Total project costs may include CASH OUT for “Eligible Business Expenses” including salaries, rent,
    utilities, inventory or other business obligations that are incurred but not paid or that will be due
    within 18 months of application (cash out limited to 20% of total value; max. amount of 85% LTV)
  • Estimated value of assets included in total project costs – subject to appraisal prior to loan closing
  • Two most recent years of business and personal tax returns (principals owning 20% or more)
  • Interim financial statements within 90 days of application, including balance sheet, income
    statement, A/R & A/P aging reports, and debt schedule
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