Refinance Commercial Real Estate
Refinancing commercial real estate debt is now a permanent feature of the SBA 504 Loan Program and can help small businesses take advantage of the low interest rates offered by the 504 Loan Program.
Below are some of the program highlights.
- Ability to refinance one or more commercial loans;
- The loan to be refinanced must be at least 24 month old and in good standing for the last 12 months;
- Business must be operating for 2 or more years;
- No full or partial ownership changes 2 years prior to date of application;
- Appraisal is not required to submit refinance application, but will be a condition of funding;
- Business must be at 51% occupancy at the time of application submission.
Loan to Value:
- Maximum refinance LTV—90% of the value of collateral pledged for existing mortgage or secured debts; Cross collateralization of other fixed assets is allowed to get to 90%;
- Maximum refinance LTV—75% of the value of collateral pledged when mortgage refinance request also includes “Eligible Business Expenses” – The aggregate amount of eligible expenses cannot exceed 25% LTV.
- Up to 90% financing;
- Longer Loan Term— Up to 20 years;
- Fixed Interest Rate for entire term of loan—June 2016—4.23%.
- Minimize risk—bank’s can limit their exposure to 50% of total 504 loan;
- Free up client’s capital
- Combined LTV (1st and 2nd mortgage) up to 90%;