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The SBA 504 Debt Refinance Program May Be Your Solution

In 2016, the Small Business Administration (“SBA”) launched the 504 Debt Refinancing Program and amended the program terms (see below) in June 2018 that enables Stonebriar Commercial Finance – Real Estate Group (“SCF REG”), in conjunction with the SBA, to refinance commercial real estate, equipment, and operating expenses (cash-out) up to 90% loan-to-value of the business’ real estate and equipment.

Who is Eligible?

  • Small business owners with existing debt on real estate and/or equipment that qualify for SBA financing (see link for more information: SBA 504 Loan Eligibility).
  • To qualify for refinancing, the debt generally must be seasoned for at least 24 months. However, the SBA can make exceptions to refinance debt less than 24 months old in cases where: (a) cash-out is not requested; and (b) the maturity date of the existing debt has been extended.

Program Highlights

  • Cash-Out Refinance
    • Eligible borrowers can obtain up to 20% of the appraised value on their assets to use towards future operating expenses (cash-out). The maximum loan-to-value for this option is 85% of the borrower’s real estate and equipment based on acceptable appraisals.
  • Consolidate Debt
    • Borrowers can often consolidate total debt obligations at a lower overall interest rate. Not only can this ease the burden of having loan obligations to several different lenders, it can also improve the borrower’s monthly debt service requirements.
  • Extended Maturity Dates/Long-Term Amortization
    • The SBA Debt Refinancing Program offers terms up to 25 years. Converting short-term debt into long-term financing can materially improve cash-flow.
  • No Out of Pocket Expenses
    • The 504 Refi Program allows borrowers to finance ordinary closing costs and expenses. The borrower has the option to either: (a) roll refinance costs (appraisal, title, lender fees, etc.) into the new loan; or (b) pay the costs directly without increasing their total loan amount.

If you are interested in seeing a real-life example of one of our refinance projects, click here to access the full case study. Reach out to one of our team members at SCF REG, and let us know how we can assist you or answer any questions you may have about refinancing your debt.

Our team is ready when you are. Don’t delay, call SCF REG about your Refi today.

Curtis Valenzuela, EVP Sr. Managing Director 714.595.1696
Ryan Ellis, Director 972.658.5136
Travis Bell, Commercial Loan Officer 972.896.9596
Nick Wall, Commercial Loan Officer 214.385.0969

Please note that nothing stated herein is intended as a promise or commitment by SCF REG to enter into a loan transaction with any borrower without the required diligence and express written approvals required by SCF REG’s credit approval process.

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