In response to the COVID-19 pandemic, the federal government doubled down on SBA lending as a key economic recovery tool and enacted several enhancements to the SBA 504 program. In addition to payment relief and waived  fees, which are already taking place, changes to the 504 REFI and the creation of a 504 Express Loan are on the horizon. The Small Business Administration (SBA) is due to release rules in the coming weeks, but here is the latest information on these impactful lending opportunities:

SBA 504 Express Loan Program

In section 328 of Public Law 116-260, also known as the Economic Aid Act, Congress grants the SBA the authority to establish a 504 Express Loan Program. Pending SBA rules, Certified Development Companies (CDC) participating in the program may expedite the approval, authorization, and closing of certain loans less than $500,000. As the popularity of the 504 program continues to grow, the Express Loan will be a great option for smaller projects to access capital faster.

Eligibility is limited to CDCs, like SomerCor, that have been awarded Accredited Lender Status by the SBA. The Express Program will expire on September 30, 2023, but can be made permanent.

SBA 504 Refinance

The 504 refinance option allows small businesses to restructure existing debt on their commercial real estate. Borrowers can leverage built-up equity and take money out for eligible operating expenses – the cash out piece ranges up to 20% of the appraised value of the commercial property.

Per Section 328 of the Economic Aid Act, Congress outlined the following changes to the 504 REFI, to be confirmed by guidance from the SBA:

  • CDCs can refinance certain existing government-guaranteed debt 
  • Qualified Debt must be at least 6 months old to be eligible for refinance – down from 2 years 
  • Elimination of requirement that loan must have been current for 1 year prior to application date 
  • Reinstatement of Alternate Job Retention Goal – all existing jobs may be counted as jobs retained (full time and full time equivalent jobs allowed)

Sign up for the SomerCor e-newsletter to receive the latest updates on these program enhancements. For additional information, connect with a member of SomerCor’s loan origination team. Loan volume is at an all time high and will only increase through the summer. Submitting your deals as soon as possible may help you make the September 30th deadline for newly authorized deals to receive payment subsidies and fee waivers.


Margaret Griffin
EVP, Chief Lending Officer
mgriffin@somercor.com
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Elisabeth Williams
VP, Loan Officer
ewilliams@somercor.com
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Eric Bacon
VP, Loan Officer
ebacon@somercor.com
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