SBA 504 Refi is a Win-Win for Banks and Borrowers
The SBA 504 Refinance Program is a strategic debt restructuring solution that helps your bank and your business clients. (Sample clients: RMC Stadium Cinemas / Aquascape, Inc. / La Peña Restaurante)
In the fall of 2024, the Small Business Administration (SBA) made enhancements to the SBA 504 Refinance program to streamline the loan process and expand borrower eligibility.
The 504 refinance program offers banks a lending option to strengthen existing credits and loan portfolios. A lender can use the 504 refi to help new and existing customers take advantage of lower interest rates and access equity, while at the same time reducing their own credit exposure through the lower LTV. The full range of 504 refi benefits for lenders include:
The 504 refinance program is only available on debt from a loan used to acquire commercial real estate. For a business to be eligible for the 504 refinance program, it must meet the following requirements:
- Property must be minimum 51% owner-occupied and meet all other SBA 504 eligibility guidelines;
- Business must be in operation for at least 2 years;
- Existing loan must be at least 6 months old;
- At least 75% of existing loan must have been for SBA 504-eligible purposes;
- May include debt subject to a federal guarantee, such as an SBA 7(a) or 504 loan.
Download the program flyer and connect with a member of SomerCor’s loan origination team today to learn more about the 504 refinance program!