Big news for small business borrowers! The Small Business Administration released guidance that borrowers who were granted a deferment due to COVID-19 may now qualify for the SBA 504 Refi program.

Through December 31, 2020, a loan that is currently on deferment, or that was granted a deferment for some period of time in the prior 12 months, will qualify to restructure existing commercial real estate debt under SBA’s 504 Refi program provided that: 

  • The applicant brings itself current on all the payments that were deferred prior to the loan being approved for debt refinancing any other payments due;
  • The deferment on the loan to be refinanced must have been granted on or after March 1, 2020; and
  • The borrower must include a statement in the application that the deferment was granted due to the borrower being adversely affected by COVID-19.

Additional guidance, effective for 504 Refi application on or after August 3, 2020, the borrower contribution for Refi without expansion involving a limited or special purpose property is reduced from 15% to 10%. This lower contribution requirement will remain in place until the first day of the calendar quarter following the end of the economic recession as determined by the National Bureau of Economic Research or its equivalent.

Like participants in the SBA 504 Loan program, 504 Refi clients can access lower monthly mortgage payments, fixed 20 or 25 year low interest rate, and payment predictability. Additionally, Refi clients can take cash out for eligible expenses (inventory, utilities, wages, business credit card debt, and paying down an operating line of credit). The cash out piece ranges up to 20% of the appraised value of the commercial property.

Download the program flyer and contact our team today for more information on the power of the 504 Refi.

Brian Comiskey              Elisabeth Williams           Eric Bacon                     Joseph Bailey
Chief Lending Officer    VP, Loan Officer                VP, Loan Officer           AVP, Loan Officer
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